If you or your loved one dies with debt, then you should keep in mind that creditors have rights. They may try to collect on the debt that is owed. To be paid, creditors must file a claim against the probate estate so that the debt owed by the decedent can be satisfied.
Knowing that creditors have rights and can bring a claim, here are the obligations of the clerk of the court, the creditor, and the the executor of the estate in Clarksville and throughout Tennessee.
What are the obligations of the Court Clerk?
According to Tennessee law, after a person has died, the clerk of the court issues letters testamentary or of administration to the personal representative of the estate (i.e. the executor or administrator). After letters have been issued, the Court Clerk gives public notice of the death of the decedent by:
- Publishing two (2) consecutive weekly notices in the same county in which the letters testamentary or of administration were granted; or, when there is not a newspaper in the county in which to publish,
- Posting written notices in three public places in the county – one of which should be posted at the usual place for posting notices at the courthouse.
The notice provides instructions to the creditor along with the following basic information:
- Name of the estate;
- Date the letters testamentary or of administration were issued; and
- The county and name of the court.
What are the obligations of a Creditor of a Tennessee probate estate?
When the creditor learns of the issuance of letters testamentary or of administration, the creditor must file a claim with the clerk of court. The notice will advise the time frame the creditor has to file this claim.
Typically, the deadline to file a claim is:
- Four (4) months from the date of the first publication or posting of the notice if the creditor received a copy of the notice within sixty (60) days of the date of the first publication or posting;
- Sixty (60) days if the creditor received a copy of the notice to creditors after sixty (60) days of the date of the first publication or posting; or
- One (1) year from the decedent’s date of death if the creditor did not receive a personal notice.
The creditor is obligated to file timely or else the “claim will be forever barred.”
What are the obligations of the Executor or Administrator of a Tennessee probate estate?
An executor of a Tennessee probate estate has a couple of obligations. These obligations are:
- Make a reasonable effort to identify creditors;
- Mail, hand-deliver, or otherwise deliver a copy of the published or posted notice to all known creditors;
- File an affidavit with the clerk of court of evidence of the publication or posting – the evidence is either an affidavit by the newspaper attesting to the dates the notice was published or by the representative attesting to the dates the notice was first posted;
- Prioritize the importance of each claim against the estate (e.g., taxes vs. funeral costs vs. credit card debt); and
- Review the claims to either approve or deny them. (Note, if the claim is denied, the creditor can request a hearing in Chancery Court).
If you have recently been named an executor, we strongly encourage you to discuss these obligations with a Clarksville estate planning attorney. The probate process can often be complex and confusing and it is good to have an experienced estate attorney in your corner to advise you.
Bottom Line
Benjamin Franklin is quoted as saying that “creditors have better memories than debtors”. There is much truth in this statement. If your loved one owed money to financial institutions or individuals, there is a high likelihood those creditors will be calling when probate is opened. Understand that creditors have rights that allow them at least four (4) months in which to prosecute a claim for their debt. If you are serving as the executor, you must make reasonable efforts to try to identify, locate, and provide notice to these creditors of the death of your loved one. If you attempt to ignore known debts, creditors can always prosecute a claim against the beneficiaries or heirs of the estate well after the estate was closed. So make sure you play by the rules and notify creditors if you serving as executor.