If you are the personal representative of a family member’s estate, you must understand how estate debts will be handled in the probate of their estate. You have specific duties when dealing with creditor claims.
At the Estate Planning & Elder Care Firm of Michigan, our experienced Clinton Township probate lawyers understand how overwhelming it can be to deal with the details of probating your loved one’s estate, especially if the estate has debts that must be resolved before the assets can be distributed. We are here to take stress off your shoulders by dealing with your loved one’s creditors and resolving their claims, as well as helping you navigate the other steps involved in estate probate.
How to Notify Creditors of a Probate Estate in Michigan
An individual may have debts at the time of death, such as a mortgage, auto loan, credit card bills, medical bills, and taxes. As part of the probate process, the personal representative for the estate must notify creditors that the probate estate has been opened and resolve creditor claims.
If you are the personal representative, you must handle estate debts whether you open an unsupervised or supervised probate of your loved one’s estate.
After the probate estate is opened, you must send a notice to known creditors using a probate court form. You must also publish a notice in a public place, typically in a local newspaper in the county where your family member lived, that meets the requirements of MCLA §700.3801.
The published notice must provide the following information:
- Your family member’s name, address, and date of death
- Personal representative’s name and address
- Probate court details where the probate was filed
- Notice that creditors must file their claims within four months of the date of the notice, or their claim will be barred
When you work with the Estate Planning & Elder Care Firm of Michigan, our probate lawyers will send a probate notice to known creditors and publish it in the local newspaper for you.
Time Frame and Requirements for Creditors to Respond
Creditors must file their claims within one month of receiving a notice or four months from the date the notice was published in the newspaper, whichever is later. If they fail to meet this deadline, they are barred from pursuing their claims.
Creditors must present their claim to the estate in one of the following ways:
- Send the personal representative a written notice of the claim that includes details on the basis of the debt, their contact information, and the amount owed
- File a lawsuit in the probate estate to obtain payment of the debt
How to Handle Creditor Claims in Your Family Member’s Probate Estate
As the personal representative of an estate, you must perform specific duties when there are estate debts. Our legal team will be with you through every step in the process, which includes the following:
- Review the claim to verify validity. It’s essential to carefully review the claim and its supporting documentation to determine whether it is a valid debt and if the amount owed is correct.
- Determine whether to allow or disallow the debt. Once our probate lawyers have investigated the claim with you, a decision will have to be made regarding whether to dispute the estate debt or allow its payment. If the debt is invalid or the amount owed is incorrect, these issues will need to be litigated in probate court.
- Pay the claim per Michigan law. If the debt is one that the estate owes, you may need to pay it. However, creditor claims must be paid according to a specific order of priority under Michigan law. For example, the costs of probating the estate, funeral and burial expenses, and taxes have priority over other debts. Our probate lawyers can advise you on what debts to pay and in what order to pay them.
Handling creditor claims is complicated, especially if you did not know much about your family member’s finances and bills before their death. You should not try to cope with them on your own, as determining if a debt is valid can be complicated without an attorney’s advice. Let our probate lawyers handle the process of dealing with creditors and estate debts, so you know everything is dealt with properly and only legitimate claims are paid.