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Nonprobate > Nonprobate Creditor's Claims Procedure

 

Washington Nonprobate

 

 

Handling Creditor's Claims in a Nonprobate Estate >

    I.  What Is the Nonprobate Creditor's Claim Procedure?

 

 

Overview of the Optional "Nonprobate Creditor's Claim Procedure"

 

In the big scheme of things, here the legislature is balancing two interests:

  • Creditors' desires to be paid the debt due them, and
     

  • Beneficiaries' and Heirs' desires to receive estate assets having clear title.

The compromise reached is that:

  • The legislature has instituted a straightforward, although relatively rigid, statutory procedure for estates (as debtors) and creditors to follow, and provided that for those who successfully follow and complete it, four months later:

    • Any creditor will have had sufficient time and opportunity to perfect his/her/its claim, and

    • As for the assets that remain, the Beneficiaries and Heirs will receive clear title, assured that no creditor should be able thereafter to successfully pursue a claim against an asset to satisfy any of Decedent's remaining unpaid debts.
       

  • The procedure for identifying creditors in a nonprobate estate involves:

    • Designating a "Notice Agent," effectively a "Creditor's Claim Personal Representative" for the nonprobate estate;

    • Filing with the Court a Designation of Notice Agent, effectively opening a nonprobate estate solely for the purpose of dealing with Creditor's Claims;

    • Publishing a Nonprobate Notice to Creditors in Decedent's resident county at death;

    • Reviewing Decedent's correspondence and records to identify possible creditors; and

    • Sending a copy of the Nonprobate Notice to Creditors to each such possible creditor, effectively inviting them to timely submit a Creditor's Claim.
       

  • The procedure for paying creditors involves:

    • Paying creditors only following the proper and timely submission of a Creditor's Claim.

Remember: This procedure, and especially publishing a Nonprobate Notice to Creditors, is ENTIRELY OPTIONAL, UP TO YOU, & NOT REQUIRED BY LAW.  It takes:

  • Some effort,
     

  • Four months of waiting for the Statute of Limitations to expire, and
     

  • $100 or more to publish the Notice to Creditors.

What you get for it is that you reduce the time that the great majority of creditors have to make their claim:

  • From 24 months after Decedent's date of death,
     

  • To 4 months after the date of first publication.

What this means is that by following this procedure, when you distribute Decedent's assets to his/her Beneficiaries following the expiration of the 4 month period, they take those assets with virtually clear title, free of any potential claims --- otherwise, the assets remain subject to potential claims for 2 years after Decedent's death.

 

WASHINGTON PROBATE believes its advantages in the great majority of cases far outweigh its effort and cost and urges you to follow it.  All it takes is one dilatory creditor to make the $100 or so cost of publication a remarkably cheap investment.

 

Side-bar:  Example of a typical published Nonprobate Notice to Creditors.

 

 

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