Generally speaking, the personal representative of an estate is NOT personally liable for estate debts (even though he is personally responsible for an accurate accounting of all estate assets and the proper disposition or distribution of those assets to heirs or beneficiaries, as the case may be). Consequently, the proper handling of estate debts is an important part of the duties.
How Long does a Creditor have to File a Claim?
Kentucky law allows a creditor six (6) months (not after the date of death but) after the appointment of the personal representative to present a claim or it can be barred. An executor can always pay any debt that has not been barred with or without a formal presentation of the claim but there are specific rules to follow concerning creditors that do file claims.
How do Creditors File Claims against Estates?
Creditors can present claims against the estate by two alternative means: (1) by delivering or mailing the personal representative a written statement of the claim indicating the basis, the name and address of the claimant and the amount owed; or (2) by filing a similar statement with the clerk of the probate court with a certification that a copy of the claim has been given or mailed to the personal representative and his attorney. If a claim is received, it should be reviewed by counsel and if not presented within the 6-month period, a statement of disallowance as barred should be filed, with a copy sent to the creditor.
On what other Grounds can a Claim be Denied?
A timely-presented claim may be disallowed on grounds other than being filed late. It may be challenged on any grounds that could be made by a living individual, such as setoff, release, and prior payment. However, to protect the estate's ability to reject a claim, it must file a statement of disallowance with a copy mailed to the creditor giving the reason therefor. If a properly filed claim against an estate goes unchallenged for 60 days passed the six-month bar date, it results in the allowance of the claim. However, a personal representative is not required to make the decision whether to allow the claim based only upon what the creditor deems sufficient to file with the claim. The law provides that if a claim is challenged, the creditor must provide an affidavit or other satisfactory evidence that the debt is owed and valid to supplement the claim.
Finally, if a decision is made to disallow a claim in whole or in part for any reason, the creditor should be given written notice that unless the claimant files a lawsuit against the personal representative within 60 days after the mailing of the notice of disallowance, the claim will be forever barred.