Taxation & Estate Planning

5 Tips for Dealing with Claims: Tip 2

By Joel A. Schoenmeyer

2. Tips 2-4 are similar in that they all require that you (the personal representative) do a full-court press to deal with the claims. This is somewhat counter-intuitive -- I think we're all familiar with the idea of a defendant (like in a foreclosure action) who delays, delays, delays. We want to do the opposite here, since here we're dealing with a notice requirement, and statutes of limitations. Basically the personal representative has to give:

-actual notice (via letter) of the probate to the decedent's known (or reasonably ascertainable) creditors; and

-notice via publication of the probate to all other ("unknown") creditors.

(See Section 18-3 of the Illinois Probate Act for details.) Having to give notice is the bad part. The good part is that the statute of limitations expires in 3 months (for creditors given actual notice) or 6 months (for creditors given notice by publication). If a creditor doesn't file his or her claim within those periods, the claim is barred.

Tip 2: You can and should give or publish notice in a way that minimizes the "window" during which creditors may file claims. To do so, you immediately publish notice once the probate is opened, then wait three more months and give written notice to all creditors you know of (after making a reasonable search by reviewing the decedent's papers and mail).

You would be surprised by how often creditors simply fail to file their claims within the above periods. This is especially the case with large creditors, where notice may get "lost in the shuffle."

Full post as published by Death and Taxes Blog on November 17, 2009 (boomark / email).