Creditor claims can be a major complicating factor during estate administration. The more debt someone has, the less property they can pass on to their loved ones when they die. In most cases, the right of creditors to demand repayment supersedes the right of family members to receive specific assets as an inheritance.
Creditor claims in probate court may require the liquidation of certain assets and can delay when people receive their inheritances. How long do creditors have to bring a claim against someone’s property after they die?
Creditors must submit their claims in a timely manner
Some states allow for a year or even longer after someone dies for creditors to bring claims in probate court. Thankfully, California has more realistic restrictions on financial obligations during probate administration. The representative of the estate will usually send notices to individual creditors when they can and will also publish notices for unknown creditors.
The creditors will need to act quickly to make a claim after receiving written notice. Under California probate laws, creditors usually need to file a claim within 60 days of receiving written notice advising them of estate administration or four months after the courts first appoint a personal representative to manage the estate. If you distribute assets too early in the process and do not have enough assets left to repay creditors, you could have personal liability for that oversight.
Provided that you fulfill these steps and then wait appropriately, you can proceed with the distribution of estate assets without worrying that creditors can make a claim against you for doing so. Understanding your responsibilities during probate can help limit your personal liability as the representative of an estate.