Estate administration and probate proceedings result in the creation of a variety of responsibilities. The personal representative or executor overseeing estate administration has many obligations. If they fail to fulfill those responsibilities, they could be at risk of removal from their position or even personal financial liability in some cases.
Creditors owed money by the decedent are among the parties who may have grounds to take legal action against a personal representative because of their conduct during estate administration. In scenarios where personal representatives failed to communicate with creditors or to pay their valid claims as required by the law, representatives could be at risk of litigation and personal financial liability.
How can people communicate with creditors during estate administration to protect themselves from financial liability?
Direct communication
Certain creditors may be easy to identify during estate administration. For example, they may hold the mortgage on the home owned by the decedent or may send notices in the mail that the personal representative receives and reviews. In such cases, the personal representative can send direct written notice to interested parties advising them of upcoming probate proceedings and the need to file a formal claim for payment. Keeping records of communications with known creditors can help personal representatives limit their exposure.
Published notice
Going through incoming mail and financial records of the decedent can often provide personal representatives with insight into who might pursue a creditor claim in probate court. However, there might be unknown parties who have an interest in the estate as well. Personal representatives could be at risk of legal action initiated by those parties if they cannot identify them. Therefore, best practices and state statutes both require that the personal representative publish notice of the impending estate administration.
Typically, they must cooperate with a newspaper in the county where the decedent lived and where the estate may soon pass through probate court. They publish notice for at least two consecutive weeks. That notice should include relevant details about the upcoming probate proceedings. Published notice provides the personal representative with protection from allegations made by unknown creditors who did not have an opportunity to make a claim in probate court.
Identifying and communicating with parties that require funds from an estate is an important component of estate administration. Personal representatives may need help identifying and fulfilling their obligations as they carry out the last wishes of a person who recently died, and that’s okay.
