Key Documents an Illinois Executor Needs to Respond to a Creditor’s Settlement Demand

Disclaimer: This article is for informational purposes only and does not constitute legal advice.

Detailed Answer

When a creditor submits a settlement demand against an estate, an executor must gather comprehensive documentation to evaluate the claim, negotiate a fair resolution, and comply with the Illinois Probate Act (755 ILCS 5). A well-organized file helps prevent delays, disputes, or personal liability.

1. Letters of Office and Proof of Appointment

Letters Testamentary or Letters of Administration: Official court document showing your authority as executor. You can obtain a certified copy from the county probate court.
Death Certificate: Certified copy to confirm date of death and trigger creditor notice periods.

2. Estate Asset Inventory

Real Property Records: Deeds, mortgage statements, tax assessments, and recent appraisals.
Bank and Investment Account Statements: Statements for checking, savings, retirement, brokerage, and safe deposit box inventories.
Personal Property Valuations: Appraisals for vehicles, jewelry, collectibles, and business interests.

3. Creditor Claim Documentation

Original Demand Letter: The creditor’s written settlement demand or proof of claim.
Supporting Contracts and Invoices: Loan agreements, credit card statements, promissory notes, medical bills, or vendor invoices underlying the claim.
Proof of Notice to Creditors: Affidavit of publication in a qualified newspaper, per 755 ILCS 5/18-3 (Illinois Probate Act).

4. Estate Accounting and Cash Flow Records

Interim Accounting: Detailed ledger of all deposits, disbursements, and distributions made on behalf of the estate.
Tax Filings: Final individual income tax return for the decedent, estate income tax returns, and proof of payment.
Bank Statements: Rapid access to current balances and recent transactions helps confirm available funds to settle valid claims.

5. Correspondence and Negotiation Records

Emails and Letters: All written communications with the creditor, collection agent, or attorney.
Settlement Proposals: Copies of any counteroffer or payment plan you propose.
Proof of Payments: Cancelled checks or electronic fund transfer records for any interim or final payments.

Helpful Hints

Organize files chronologically and by category (assets, liabilities, correspondence).
Keep original documents secure and transmit copies in response to demands.
Use a spreadsheet or estate administration software to track deadlines under 755 ILCS 5/18-3 and 5/18-5 for claim allowance or denial.
Consult a probate attorney if a claim exceeds the estate’s available assets or if you dispute validity.
Maintain clear communication: prompt responses build trust and may lead to faster resolutions.