There are certain risks that come with serving as the executor or personal representative of someone’s estate after they die. In a scenario where an executor fails to comply with state law regarding someone’s remaining responsibilities, they could have personal liability for some of the financial obligations of the estate.
Sending proper notice to creditors is an important part of the estate administration process. Only when an executor carefully complies with state law can they protect themselves from future litigation. What does notifying creditors involve?
Publishing written notice
The rules for notifying creditors and how long they have to make a claim in court differ slightly in different states. Minnesota state law typically requires that the executor of the estate will publish notice of estate administration for two consecutive weeks in a local newspaper that publishes legal news in the county where the estate will pass through the probate courts.
The creditors then have four months to submit claims to the probate courts or they may lose their right to request repayment.
Sending letters to all known creditors
The executor will also need to send written notice to all known creditors during that time to advise them of the state administration of the need to make a claim in probate court. They also need to actively look for unknown creditors and notify them whenever possible.
Small mistakes can have large consequences during estate administration
While your main goal during estate administration may be to distribute property in accordance with someone’s wishes, you have to handle their financial obligations first. The debts owed by the deceased individual are a common source of errors during estate administration.
In a scenario where someone dies with more debt than assets, the executor of the estate will not have any liability for amounts that the estate cannot pay provided that they follow the right steps. If they distribute estate property without properly notifying creditors, they may have personal liability for the unpaid debts.
Mistakes regarding the distribution of property and the management of estate assets can complicate probate proceedings and sometimes lead to personal liability for the executor. Having proper guidance throughout the probate process will reduce the risk involved in estate administration for the executor.