When your loved one passes away, their estate may have to go through probate. Probate is the legal process of administering your loved one’s assets and liabilities.
During probate, creditors have the opportunity to submit claims for any debts owed by your loved one. In other words, if your loved one still has outstanding debts, creditors can file claims against the estate to recover payment.
Probate can already be a long and expensive process. Unfortunately, creditor claims can make it even more costly and time-consuming. As the executor, you cannot distribute the estate to beneficiaries until you settle the claims, and settlements can make probate drag on even longer.
Nevertheless, there are several ways you can reduce delays:
Notify creditors as soon as possible
As soon as probate begins, notify known and unknown creditors of your loved one’s death. You can do this by contacting creditors directly and/or publishing a public notice in the local newspaper.
Prompt notification allows creditors to prepare and submit their claims within the required time frame. This helps reduce the risk of late claims that could delay the process. In Georgia, creditors have up to three months from the date of the last published notice to file a claim.
Review and verify each claim
It is crucial to carefully review all claims submitted by creditors, as perhaps not all of them will be valid. This involves verifying the validity of each claim and making sure the amounts are accurate.
If there are discrepancies or if a claim seems inflated, you must dispute it promptly to avoid unnecessary payments and delays.
Negotiate settlements early
If the estate does not have enough assets to cover all claims, you may be able to negotiate with creditors to settle debts for a lesser amount.
Negotiating can lead to two significant benefits:
- You can help preserve the estate’s assets
- You can speed up the closure of the estate
It is best to calculate the estate’s value and debts early on in the process. Doing so can help you determine if there is enough money to pay off creditors. Otherwise, you can start negotiations sooner rather than later.
Seek legal assistance
Probate is often a complex process, especially when there are creditor claims in the mix. This is why many families seek guidance from probate attorneys. They can help you handle each creditor claim properly, communicate with creditors and minimize setbacks as much as possible.
Remember that you don’t have to do this alone. With careful planning and legal guidance, you can streamline probate and handle your loved one’s estate with confidence.