How to File a Claim Against an Estate

Will and Trust Lawyer for New York City Residents

The formal probate process can be complicated and time-consuming. During probate, a decedent's last will and testament is admitted, her assets are identified, gift and estate tax are calculated and paid, and claims are brought. The person who performs this work is a fiduciary of the estate, also known as an administrator or executor. In New York, creditors have a maximum of seven months to file claims against an estate. If you have questions related to this aspect of estate administration, Jules Haas is a seasoned New York City estate litigation attorney who may be able to assist you.

Claims Against the Estate

When someone dies, the fiduciary of an estate has a duty to ascertain and pay any of the decedent's outstanding debts. Under New York law, a fiduciary doesn't need to try to find all of the creditors with claims against the estate. Instead, the creditors are supposed to use due diligence to follow up on collecting debts and finding out whether the person who owes the debt has died. Claims against an estate may involve medical bills, bank loans, unpaid fees, rent money, credit card debt, or personal loans. A creditor needs to comply with the requirements of Surrogate's Court Procedure Act sections 1802 and 1803. However, an executor or administrator is obligated to satisfy or determine the validity of claims for which there is reasonable notice.

Letters are the documents issued by the court empowering a fiduciary to open an estate. Typically, these include Letters Testamentary and Letters of Administration. Under section 1802, when a claim isn't presented within seven months from the issuance of Letters, the administrator will not be liable for any assets or money that may have been paid in good faith in order to satisfy lawful claims or any distributions made before the claim was presented. The seven-month period begins on the date Letters were first issued and won't be interrupted by any subsequent issue of Letters. However, any period of time prior to the appointment of a fiduciary is not counted as part of the seven months.

Notice of Claim

Once a creditor becomes aware of a decedent's death, they must send a written notice of claim. The claim should set forth the amount owed and the particular facts out of which the claim arises. As referenced above, a fiduciary won't be held accountable for good faith distributions of the estate's assets made if a creditor does not come forward until after the seven-month period. However, if a creditor makes their claim within the requisite time frame, the fiduciary can be held personally liable if she distributes the assets prior to the passage of that seven-month period. A knowledgeable estate litigation lawyer can help you navigate the rules associated with handling claims against an estate.

What if There are Insufficient Funds?

In the event a decedent's estate does not have sufficient assets to satisfy all claims, as well as pay all bequests in full, the bequests may need to be reduced so that the creditors' claims can be paid. Creditors have priority regarding the payment of estate assets. If an estate is wholly unable to satisfy a claim, a creditor may need to see if there are assets that pass outside of the administration estate, such as joint assets, that can be pursued to pay the claim.

Proceedings to Determine Whether a Claim Should Proceed

Disputed claims can result in estate litigation. In some cases, an accounting is appropriate. In this kind of proceeding, the fiduciary is supposed to give all parties interested in an estate an accounting of the estate's transactions during the course of estate administration.

Under section 1809, which governs the validity and enforceability of claims, if a fiduciary knows or has notice of a claim's assertion, but there isn't a written notice or there's reason to question the claim's validity, the fiduciary can petition the court regarding the facts and ask that the claimant be required to show cause why the claim should be allowed to go forward. If a claimant complies with section 1803 but the claim isn't allowed in its entirety, the claimant can ask the court to require the fiduciary to show cause why the claim shouldn't go forward.

Retain a Seasoned Estate Litigation Attorney in New York City

Estate litigation can be complex. If you are concerned about bringing or defending against claims against an estate in New York City, you can discuss your situation with probate lawyer Jules Haas. Mr. Haas possesses more than 30 years of experience handling trust and estate matters, including litigation. He represents people in Manhattan, the Bronx, Queens, Kings, Richmond, Nassau, Suffolk, and Westchester Counties. Call us at (212) 355-2575 or contact us through our online form for a free consultation.

How to File a Claim Against an Estate

Source: https://www.juleshaasattorney.com/claims-against-the-estate.html

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