Detailed Answer
When you administer an estate in California, you must manage creditor claims in a timely and orderly way. The Probate Code sets deadlines and priorities for claims. Follow these steps:
1. Identify and Notify Creditors
Under Probate Code § 9100, you must mail notice to known creditors within two months of your appointment. Then publish a general notice in a newspaper of general circulation in the decedent’s county of residence within four months, per Probate Code § 9200.
2. Receive and Review Claims
Creditors must file claims by the later of four months after the first publication of the notice or 30 days after personal notice, as stated in Probate Code § 9202. Check each claim’s validity, amount, and any supporting documents.
3. Allow or Reject Claims
Evaluate each claim. You may reject it if it lacks merit or proper documentation. If you reject a claim, notify the creditor in writing and file a notice of rejection. Claims not rejected within 45 days of filing become “allowed” by default.
4. Prioritize Payments
California law ranks debts in the order of payment under Probate Code § 11420:
- Expenses of administration (filing fees, attorney fees).
- Family allowance and homestead allowances.
- Funeral expenses up to $15,000.
- Taxes and expenses of last illness.
- Other debts, including judgments and general unsecured debts.
5. Distribute Assets
After paying debts in order, distribute the remaining assets to beneficiaries under the will or California’s laws of intestacy.
Helpful Hints
- Keep detailed records of all notices sent and received.
- Create a spreadsheet to track claims, deadlines, and statuses.
- Communicate promptly with creditors to avoid disputes.
- Set aside funds to cover estimated claims before distribution.
- Consult a probate attorney for complex or large estates.
Disclaimer: This article is for educational purposes and does not constitute legal advice. Consult an attorney to address your specific situation.