Determining Claims in Probate
A Personal Representative is a person who is chosen to take care of the financial affairs of the deceased or the decedent. One of the duties of a Personal Representative is gathering all of the assets of the decedent, determining if any of the assets are exempt from creditor claims, and safeguarding those assets for the benefit of the beneficiaries. Before the assets can be distributed to beneficiaries, the Personal Representative must ascertain any creditors of the decedent.
After the Letters of Administration is issued, the Personal Representative identifies creditors in two different ways. To start, a Notice to Creditors is published in the newspaper and gives 90 days for anyone who feels they are owed money by the decedent to file a claim for payment. In addition, the Personal Representative sends a copy of the Notice to Creditors to any known creditors or reasonably ascertainable creditors. If a creditor is served an individual copy of the Notice to Creditors that creditor then has 30 days to file a claim for payment.
Once the claims are filed, the Personal Representative determines the class and priority of each claim according to Florida Statute Section 733.707—giving the highest priority to the costs and expenses for the probate administration as well as compensation for the services rendered by the Personal Representative.
If there are enough assets in the estate, then all creditors with valid claims are paid in full. If there are insufficient funds to pay these creditors, then the Personal Representative begins paying the classes in order of priority until all estate funds are exhausted. Once the Personal Representative encounters a class which will not be paid in full, creditors in that class are paid ratably in proportion to their claim and the remaining creditors in the lower classes go unpaid.
It is only after all creditor claims are satisfied that the Personal Representative can distribute the remaining assets to the beneficiaries. It is important to seek advice from an experienced probate attorney when determining the classification and priority of creditor claims. Contact the attorneys at Brandon Legal Group today to schedule a free consultation.