Receiving an inheritance does not generally occur immediately after a person dies. The estate may need to pass through probate court before heirs or beneficiaries receive any of the property that belonged to the decedent.
Personal representatives sometimes need to liquidate assets to cover tax obligations and pay creditors. Outside parties, ranging from a hospital that provided end-of-life care to credit card companies, can theoretically request payment from an estate. The funds spent settling those obligations reduce what beneficiaries inherit. Creditor claims can increase the overall probate timeline as well.
How long do creditors usually have to submit a request for repayment during estate administration?
Creditors have months to take action
Publishing notice of the upcoming probate case and sending written notice to known creditors are among the first steps personal representatives typically take during estate administration. Once they send notice, that begins the countdown toward the deadline for creditor claims.
Typically, creditors with valid claims have up to seven months to submit a request for payment during probate proceedings. Personal representatives often wait until after that deadline passes to make sizable distributions from the estate to heirs or beneficiaries. Especially in cases where the estate might prove insolvent, meaning there are more debts than funds to pay them, waiting for all creditor claims to arrive before distributing property is often the safest option available.
Having a probate and estate administration attorney on standby to provide guidance about technical requirements can limit a personal representative’s exposure. Legal guidance about creditor rights can help people to better ensure that they fulfill all their responsibilities while minimizing a risk of litigation and other probate complications.