BUSINESS LAW  101 / Probate Creditors and Claims

By Albert L. Kelley

One of the first jobs of the Personal Representative is to determine all of the debts of the estate. Once all readily ascertainable debts have been discovered, a form called a Notice to Creditors must be sent to every known creditor. The form must be sent by certified mail so the Personal Representative has proof that the form was received. The Personal Representative must also publish a copy of the Notice to Creditors in a newspaper that is regularly published in the county where the probate is being administered. This is to provide notice to any creditor the Personal Representative may not have discovered. In addition, if the Decedent was over 55, the Notice to Creditors must also be sent to the Agency of Health Care Administration. The Notice to Creditors must state the name of the decedent, the file number of the estate, the address of the court, the name and address of the personal representative, the name and address of the personal representative’s attorney, and the date of first publication. Once the Notice has been published, any creditor who desires to file a claim with the estate must do so within 3 months of the Notice being run in the newspaper or within 30 days of being personally served with the Notice, whichever is longer.

The Claims must be filed with the Clerk of the Court and copies sent to the Personal Representative. Any claims filed outside the deadline are deemed barred and do not need to be paid. Those claims that are filed timely need to be categorized.

The creditor claims are not equal; they are based on categories or classes. In other words, when the Personal Representative starts paying the claims, they must be paid in a particular order with higher priority claims being paid in full before more junior claims. Each class must be satisfied in full before any payments are made to the next class. There are a total of eight classes. So the expenses in Class one get paid in full, before the personal representative even looks to the claims of Class two. If the estate runs out of assets before a class gets paid, the claims in that class and all other classes do not get paid and are released. If the funds are insufficient to pay a class in full, the claims of that class re paid on a pro rata basis. Class 1 is the cost of administration of the estate, including compensation to the Personal Representative and the Attorney for the estate. Class two is the reasonable costs of the decedent’s funeral and interment up to $6,000. Class three is taxes and government debts. Class four is medical and hospital expenses during the last 60 days of the last illness of the decedent, including personal care. Class five is family allowances. Class six is court ordered child support. Class seven is debts acquired after the death of the decedent. And last are all other claims, including secured and unsecured claims and any funeral expenses over $6,000.

Because claims are based on the category they fall into, no claims should be paid until the end of the three month window following the initial publication of the Notice to Creditors so the Personal Representative knows all the claims that are being filed.

Al Kelley is a Florida business law attorney located in Key West and previously taught business law, personnel law and labor law at St. Leo University. He is also the author of 4 law books: (“Basics of Business Law” “Basics of Florida’s Small Claims Court”, “Basics of Florida’s Landlord/Tenant Law” and “Basics of Starting a Florida Business” (Absolutely Amazing e-Books)). This article is being offered as a public service and is not intended to provide specific legal advice. If you have any questions about legal issues, you should confer with a licensed Florida attorney.

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