When people create estate plans, one of their goals is often to avoid probate court. Probate proceedings can delay loved ones’ receipt of property from an estate. They can also cost money, which then reduces how much the beneficiaries of the estate eventually receive.
The goal of probate court oversight is to ensure that the executor performs their duties and that the estate complies with all applicable laws. The repayment of debts is an important part of the probate process.
Executors should do their best to locate information about debts and open accounts. They also need to wait to distribute the property from the estate until they have settled things with all the creditors of the deceased. How long do creditors have to bring a claim against an estate?
Kentucky recently changed its law about estate claims by creditors
Kentucky used to have two separate statutory rules for creditors hoping to get money or other assets from an estate. The limitation for filing a claim used to vary depending on whether or not there was an executor handling the estate. Now, both estates with an executor and without one have the same limitations on creditor claims.
Businesses and individuals have eight months from the death of the debtor to assert their claim to assets from the estate. If they do not take action within those eight months, they lose their right to bring claims against the estate, its beneficiaries or the executor.
For you as the executor, this rule means that you may have to wait as long as eight months before you finally distribute the property to the beneficiaries of the estate. Waiting can mean frustration for the heirs, but it will ensure protection for you, since the executor can be liable for unpaid debts in some situations. An experienced attorney can help you.