A creditor with a claim against a Pennsylvania probate estate is someone who was owed money by the decedent prior to decedent’s death.
In Pennsylvania, the personal representative of the estate is not required to send direct notice of the estate administration to a decedent’s creditors. Instead, the personal representative is required to publish notice of the estate administration, which triggers the deadline for creditor claims against an estate under Pennsylvania law.
What Is the Deadline For Creditor Claims In Pennsylvania Probate?
Creditors are required to file their claims within one year from the publication of the Notice of Administration. If a creditor does not file a claim within one year from publication, the creditor can only recover from estate assets that were not distributed before the notice of the claim was received. 20 Pa. C.S. § 3532. See Deadlines and Timelines in Pennsylvania Probate for more key deadlines.
How Does a Pennsylvania Creditor Secure a Claim?
A Pennsylvania creditor with a claim against a decedent can file a claim against the estate with the court, or provide written notice to the personal representative.
Filing a Creditor Claim
A creditor is also allowed to file a claim against the estate before letters are granted. This sometimes occurs with a judgment creditor who is aware of the decedent’s death and does not want to wait to get their creditor claim on record.
A creditor claim is filed by completing a Notice of Claim form and submitting it to the register.
By filing a creditor claim with the orphans’ court, a creditor preserves their right to collect from distributees of the estate (beneficiaries who have received their bequests) of real property if:
- Real property is an estate asset.
- The personal representative of the estate does not pay the creditor claim.
- The creditor claim was filed with one year of death.
Except for liens existing at death, creditor claims become unenforceable against a bona fide purchaser of real property that purchased the property from beneficiaries or heirs:
- more than one year after the death of the decedent and when no letters issued in the Commonwealth upon the decedent’s estate were in effect; or
- within such year if no letters upon the decedent’s estate have been issued in the Commonwealth during that year.
Written Notice Of Creditor Claim
Written notice of any creditor claim against a Pennsylvania decedent given to the personal representative or his attorney of record before the claim is barred shall toll the statute of limitation. If there is no real property in the estate or if the creditor is not concerned with preserving a claim against the distributees of real property, this written notice to the personal representative is sufficient to secure the claim. 20 Pa. C.S. § 3384.
When Can a Pennsylvania Personal Representative Pay a Creditor Claim?
If the personal representative determines that the creditor claim is valid, the personal representative is free to pay the claim under Pennsylvania law if there are sufficient assets to do so.
If the personal representative does not pay the creditor claim in full, then the creditor has a couple of options.
Presentation Of Creditor Claim At Audit
If the personal representative does not pay the claim in full and files a formal account, then the Pennsylvania orphans’ court assesses the creditor claim during the audit of the estate. The creditor receives notice of the audit, and the creditor can present the claim there.
Often, the creditor chooses not to present the claim at audit, resulting in dismissal of the claim and no recovery by the creditor from the estate. 20 Pa. C.S. § 3386.
If the personal representative does not pay the claim in full and does not file a formal account, then the creditor can pursue the claim with a direct action. The action can be against the distributees or against the personal representative as appropriate, but cannot be against a distributee of real property unless the creditor claim was filed directly with the Pennsylvania orphans’ court. 20 Pa. C.S. § 3532.
If the personal representative made distributions within one year of the advertisement of the grant of letters OR following receipt of the creditor claim, even if one year has passed, then the personal representative is liable to a creditor for their claim against the Pennsylvania estate. 20 Pa. C.S. § 3532.
A distributee can be liable to a creditor in certain limited circumstances.
A distributee of any asset other than real property is liable to a creditor if the creditor presented the claim to the personal representative within one year of the grant of letters, if the personal representative did not pay the claim, and if the personal representative did not file a formal account. 20 Pa. C.S. § 3532.
A distributee of real property can be liable to a creditor if the claim was filed with the Pennsylvania orphans’ court during the first year of the administration of the estate. 20 Pa. C.S. § 3532.
A Pennsylvania probate lawyer who routinely handles estate administration will be well versed in the nuances of creditor claims and able to help you navigate the process.