California probate creditor claims can be a technical trap for the unwary. With notice requirements and strict deadlines and timelines in California probate, knowing who is entitled to notice, and when claims have to be filed is incredibly important.
What Is A Creditor Claim In California Probate?
A “creditor” is any person who may have a claim against estate property. A creditor claim is a demand for payment for any of the following, whether due, not due, accrued or not accrued, or contingent, and whether liquidated or unliquidated:
(1) Liability of the decedent, whether arising in contract, tort, or otherwise.
(2) Liability for taxes incurred before the decedent’s death, whether assessed before or after the decedent’s death, other than property taxes and assessments secured by real property liens.
(3) Liability of the estate for funeral expenses of the decedent. California Probate Code §9000(a).
A “claim” does not include a dispute regarding title of a decedent to specific property alleged to be included in the decedent’s estate.
What Is The Required Notice For California Creditor Claims?
The personal representative of the California probate is required to give notice of administration of the estate to the known or reasonably ascertainable creditors of the decedent. The notice has to be mailed or personally delivered pursuant to California Probate Code § 1215.
The notice must be given within the later of:
- Four months after the date letters are first issued.
- Thirty days after the personal representative first has knowledge of the creditor.
California Probate Code § 9051. For a complete chart of the deadlines and timelines in California Probate, click here. Even if the personal representative learns about the creditor claim after the expiration of the claim filing period, the personal representative must give notice. Although the notice does not extend the time to file a claim, the creditor may petition to file a late claim.
What is a Known Creditor In California Probate?
A known creditor in California probate is a creditor that has demanded payment from the decedent or the estate. The personal representative is required to give notice to creditors that have made their claims known.
If in doubt, it is always a good idea for the personal representative to give a creditor or potential creditor the requisite notice.
How Do You File a Creditor Claim in A California Probate?
A creditor claim must be filed with the California Probate court. A copy of the creditor claim must be served on the personal representative within the later of 30 days of the filing of the claim or 4 months after letters are issued to a personal representative with general powers.
If a personal representative is appointed after the filing of the creditor claim, the claim must be served on the subsequently appointed personal representative.
If the creditor claim is not filed with the court and served on the personal representative, then the claim is invalid. California Probate Code § 9150(d).
What Is the Form of a Creditor Claim?
The required form of a California probate creditor claim can be found in Judicial Council Form DE-172.
If a creditor claim is based upon a written instrument, an original or copy of the original must be attached to the claim. California Probate Code § 9152(a).
If the creditor claim is secured by a mortgage, deed of trust, or other recorded lien, the security can be described and referenced in the claim. California Probate Code §9152(b).
How Long Do You Have To File A Creditor Claim In California Probate?
A creditor is required to file a claim before the expiration of the later of:
- Four months after the date that letters are first issued to a general personal representative.
- Sixty days after the date that the notice of administration is given to the creditor.
Can I File a Late Creditor Claim in California?
You can try to file a late creditor claim in California. A creditor or the personal representative can petition to allow a later creditor claim if:
- The personal representative failed to send proper notice of administration of the estate to the creditor, and the petition is filed within 60 days of when the creditor has actual knowledge of the estate administration; or,
- The creditor had no knowledge of the facts giving rise to the existence of the claim more than 30 days before the time for filing a claim and the petition is filed within 60 days after the creditor has actual knowledge of both of the following:
- >> existence of the facts reasonably giving rise to the existence of the claim
- >>the administration of the estate
However, a claim cannot be filed after the California probate court makes an order for final distribution of the estate. California Probate Code § 9103(b).
Can A Creditor Claim Be Amended?
Yes, a California probate creditor claim can be amended. However, an amendment cannot be made to increase the amount of the claim after the time for filing the creditor claim has expired. No amendment can be made after the earlier of:
- The order for final distribution
- One year after letters are first issued to a general personal representative.
What Happens If The Personal Representative Rejects the Creditor Claim?
A California personal representative can either allow or reject a probate creditor claim in whole or in part. The personal representative files the allowance or rejection of the claim with the California probate court clerk, and gives the creditor notice.
If the claim is rejected by the personal representative, or if the creditor refuses to accept the amount allowed or approved in satisfaction of the claim, the creditor may bring a civil action on the claim. California Probate Code § 9350 et seq. An action may not be commenced against a decedent’s personal representative on a cause of action against the decedent unless a claim is first filed as provided in this part and the claim is rejected in whole or in part.
Pursuant to § 9353 of the California probate code:
(a) Regardless of whether the statute of limitations otherwise applicable to a claim will expire before or after the following times, a claim rejected in whole or in part is barred as to the part rejected unless, within the following times, the creditor commences an action on the claim or the matter is referred to a referee or to arbitration:
(1) If the claim is due at the time the notice of rejection is given, 90 days after the notice is given.
(2) If the claim is not due at the time the notice of rejection is given, 90 days after the claim becomes due.
(b) The time during which there is a vacancy in the office of the personal representative shall be excluded from the period determined under subdivision (a).
Creditor claims in California probate must adhere to the deadlines and notice requirements set forth in the California probate code. Failure to meet a deadline, to send proper notice, or a non-compliant filing can all result in a creditor claim being barred.