The executor or personal representative of a New York probate estate is responsible for notifying creditors of the decedent about the decedent’s death so that they can present a claim to the estate in a timely manner under New York Probate Laws. After the claim has been submitted and an accounting of the estate assets has been made by the personal representative, the personal representative must give each creditor a Notice of Allowance of Claim form advising the creditor of the approval or rejection of their claim in whole or in part and must state any valid reasons for the denial. If after 90 days, a claim has not been approved, it is deemed to be rejected under New York Probate Law. The creditor may file a challenge to the claim with the New York Surrogate’s Court, and the Court has jurisdiction to rule on the matter by either denying the claim or approving it.
Determining the Priority and Validity of Claims
Priorities for paying claims and debts start with first making sure there is enough money for burial and funeral costs as well as for paying taxes, paying secured claims and paying unsecured creditors. Unless the decedent left a list of debts, it may not always be easy for the personal representative to determine all the creditors of the decedent. Or if there are not enough assets to pay unsecured debts, the personal representative may then have to decide what proportional amounts to pay to each creditor or may not be able to pay all creditors. If there is a mortgage or other secured property, the value of the real property will need to be determined, and the asset may need to be sold to pay off the secured debt.
It is not unusual for a person to die insolvent (owing more debts than assets). Heirs may need to pay for funeral expenses out of their own pocket if the estate lacks the resources. When there are not enough assets, the beneficiaries will not be able to receive their distributions under the will either.
A personal representative can be held liable by the heirs and beneficiaries of the estate for paying an invalid or incorrect claim. Therefore, the personal representative may want to seek legal assistance from a New York Probate Attorney in determining the validity of claims submitted by creditors and other interested parties to make sure the personal representative receives the proper advice and has a good understanding of how to pay creditor’s claims under New York Probate Laws.
If you wish to speak to a New York estate attorney, call the Law Offices of Albert Goodwin at (212) 233-1233.