Nothing is so important as how probate claims are handled in a probate when the claims threaten to consume the probate estate. Undisputed claims should be paid, but the law makes it up to the creditor to protect their rights. This article covers the way that an estate would handle probate claims within the Oklahoma probate law.
• A purpose of a probate claim in a probate is to determine, pay, and settle all claims against the decedent and his/her estate.
• Both the personal representative and the claimant must strictly comply with the statutory procedures.
• A claimant who fails to present their probate claim or to otherwise follow the statutory procedures for proving their claim, will have such claim non-suited and barred from judicial enforcement
2) Notice to Creditors:
• Within two months after the issuance of the personal representative’s letters of administration, they must file notice to creditors of the deceased stating that probate claims against the deceased will be forever barred unless presented to the personal representative as specified in the notice.
• If the personal representative fails to give this notice to creditors within the time allowed, it could result in the court revoking the letters of appointment
• The notice to creditors needs to be published in the county in which the probate is filed, once each week for two consecutive weeks.
• The creditors will have 2 months to file their probate claim and if they do not the probate claim will be forever barred.
• The notice is to be given by mail to all known creditors of the deceased at their last known addresses within 10 days following the date said notice is filed with the district court clerk
3) Claims Required to Be Filed
• All probate claims arising upon contracts, whether the same be due, not due or contingent, must be presented on or before the presentment date as provided in the notice to creditors, and any probate claim not so presented is barred forever
• If a claimant is doubtful as to the nature of their probate claim, they should file it before the presentment date and not run the risk of a later judicial determination that their claim was one requiring filing in the probate proceedings
• All arising probate claims upon contracts, whether due, not due, or contingent, must be presented to the personal representative within the time limited in the notice to creditors and a failure to do so will cause the claim to be forever barred.
• A probate claim must also be filed for contracts implied in law
• A antenuptial agreement against the decedent’s estate requires a probate claim to be filed within the time required for filing claims.
• A probate claim arising in tort need not be presented to the executor or administrator before suing.
• Fraud in the inducement to enter into a contract is a tort claim
6) Mortgages on Real Estate and Personal Property
• A mortgagee has the option of filing or not filing a creditor’s claim in the estate of the mortgagor.
• If a mortgagee does not file a creditor’s claim, then such mortgagee is restricted to enforcing the mortgage lien only against the mortgaged property.
7) State and Federal Claims
• Probate Claims of the State of Oklahoma arising under contract must be timely presented or be barred.
8) Last Illness and Funeral Expenses
• Out of the order and priority for payment of claims, and funeral expenses are of first priority under the statute.
• A funeral expense is not a debt existing at the date of the decedent’s death, and not creditor’s claim is required.
• The expenses of last illness are claims to be filed, and barred if not filed.
• There must be a connection between the expenses incurred and the last illness of the deceased.
9) Judgment Creditors and Actions Pending
• A judgment against the decedent for recovery of money must be presented to the personal representative, like any other claim.
• If the judgment is for the recovery of real or personal property, or the enforcement of a lien thereon, the proceeding may continue without the filing of a claim.
10) Form and Proof of Probate Claim
• The statute does not require any particular form of probate claim.
• It does require the probate claim be signed by the claimant or the claimant’s authorized
representative, and shall state the exact amount claimed, the nature and source of the claim with reasonable particularity.
• The personal representative may require vouchers or other evidence to be produced in support of the probate claim.
• A claimant may amend the probate claim, withdraw and substitute and claim at any time before the presentment date.
11) Presentation of Probate Claims
• A probate claim against a decedents estate can be established only by being first presented to and allowed by the personal representative, and then being presented to and approved by the court, or by a judgment thereon in an action against the personal representative in a proper court in the event the probate claim is not allowed or approved when presented.
• A personal representative cannot act upon his own probate claim against the estate, but must present the probate claim to the probate court.
• If a probate Judge has a probate claim against the decedent’s estate, the personal representative may allow or reject the probate claim.
• When a probate claim has been barred by the general statute of limitations which expired before the decedent’s death, it is totally unenforceable against the estate.
12) Allowance and Rejection of Probate Claims
• When a probate claim is presented to the personal representative, they must endorse thereon there allowance or rejection, with the date thereof, within 30 days after the probate claim has been presented.
• If the personal representative fails or refuses to act upon the probate claim within said 30 days, it is equivalent to a rejection of the claim on the 30th day.
• If the personal representative allows the claim, it must be presented with the date of such presentment indicated on the claim, to the judge for his approval.
• The judge must endorse in their manner for their allowance or rejection.
• If the personal representative rejects a claim within said 30 days, in whole or in part, the personal representative must mail a notice of such rejection to the creditor by regular first-class mail to the creditors last known address not later than 5 days following the date of such partial or total rejection.
13) Priority and Payment of Probate Claims
• It’s not indicated, the expenses of the probate administration, attorney fees of the personal representative, and the family allowance must be paid or provided for before any other debts are paid.
• Funeral expenses would be paid next
• The next priority is the taxes to the United States and the state, county or city.
• Liens upon their property, and mortgages in the order of their date
• Lastly would be all other demands against the estate
14) Non-probate Assets Free of Creditor Claims
• Non-probate assets are those assets in which the decedent had an interest, but title to which passed by contract or by operation of law upon the death of the decedent.
15) Liability of Personal Representative
• If the personal representative of an insolvent estate pays probate claims otherwise that in the statutory order of priority, or pays debts where no creditor’s probate claim has been filed, they will incur personal liability to those creditors who suffer by their acts.
• It is not adviseable for a personal representative to attempt a proration in an estate that cannot pay all debts in full, without an order of Court.
• A personal representative may also be liable to a creditor where the personal representative has failed to give notice to creditors as required in the statutory notice to creditors
16) Confirmation of Notice to Creditors on Final Decree
• At the final account hearing the probate Judge must conduct an inquiry to judically determine whether or not the personal representative has complied.
• A final decree that fails to contain the finding required by § 632.3 shall be voidable.
Probate is technical. You need expert representation if you are the personal representative, a creditor, or an heir who wants to be sure that he or she is getting a fair deal. Brent D. Coldiron has practiced law for over 42 years. You can depend on him. He knows what to do! Call Brent at (405) 478-5655 or 737-2244. His offices are at 1800 East Memorial Road, Suite 106, Oklahoma City, OK 73131 and 2801 Parklawn Drive, Suite 503, Midwest City.