An executor or administrator of an estate is required to give notice of administration to all know and reasonably discoverable creditors of the decedent. There is a formal process for giving notice which is the subject of another blog. (See Beneficiaries Residing in Another Country Blog) Once the required notice is given the creditors also have legal requirement and/or procedures for filing a claim against the estate of the decedent and failure to adhere to the legal requirements of the California Probate Code can lead to bar to enforcing the claim.
What is a creditor and a claim? A creditor and a claim are defined by the probate code as follows:
Probate Code § 9000. “Claim”
As used in this division:
(a) “Claim” means a demand for payment for any of the following, whether due, not due, accrued or not accrued, or contingent, and whether liquidated or unliquidated:
(1) Liability of the decedent, whether arising in contract, tort, or otherwise.
(2) Liability for taxes incurred before the decedent’s death, whether assessed before or after the decedent’s death, other than property taxes and assessments secured by real property liens.
(3) Liability of the estate for funeral expenses of the decedent.
(b) “Claim” does not include a dispute regarding title of a decedent to specific property alleged to be included in the decedent’s estate.
(c) “Creditor” means a person who may have a claim against estate property.
When and how must a creditor file a against the Decedent’s Estate? The probate code specifies how and when a creditor must file a claim as follows:
Probate Code § 9150. How claim is filed
(a) A claim may be filed by the creditor or a person acting on behalf of the creditor.
(b) A claim shall be filed with the court and a copy shall be served on the personal representative, or on a person who is later appointed and qualified as personal representative.
(c) Service of the claim on the personal representative shall be made within the later of 30 days of the filing of the claim or four months after letters issue to a personal representative with general powers. Service shall not be required after the claim has been allowed or rejected.
(d) If the creditor does not file the claim with the court and serve the claim on the personal representative as provided in this section, the claim shall be invalid.
What form is required to make a claim? The probate code specifies the form for any claim as follows:
Probate Code § 9153. Form for claim
A claim form adopted by the Judicial Council shall inform the creditor that the claim must be filed with the court and a copy delivered pursuant to Section 1215 to the personal representative. The claim form shall include a proof of delivery of a copy of the claim to the personal representative, which may be completed by the creditor.
What happens if a creditor does not file a claim against the estate on time? The probate code specifies that any late filed claims are barred as follows:
Probate Code § 9002. Claim requirement
Except as otherwise provided by statute:
(a) All claims shall be filed in the manner and within the time provided in this part.
(b) A claim that is not filed as provided in this part is barred.
If you have any questions about creditor claims in a probate matter you should contact Walker Law Corporation for a consultation.