Welcome to CPA at Law, helping individuals and small businesses plan for the future and keep what they have.

This is the personal blog of Sterling Olander, a Certified Public Accountant and Utah-licensed attorney. For over thirteen years, I have assisted clients with estate planning and administration, tax mitigation, tax controversies, small business planning, asset protection, and nonprofit law.

I write about any legal, tax, or technological information that I find interesting or useful in serving my clients. All ideas expressed herein are my own and don't constitute legal or tax advice.

Introduction to Claims Against an Estate

A creditor of an individual who passes away has certain rights but must take affirmative steps to preserve those rights in order to receive payment. In Utah, a creditor wishing to present a claim must deliver or mail a written claim to the personal representative of the estate or the personal representative's attorney of record or file a claim in the court probate proceeding. Practically speaking, this means that a creditor can only bring a claim against an estate after a personal representative has been appointed or a probate matter opened in court.

All claims against a decedent's estate that arise before the death of the decedent must be presented within one year after the decedent's death at the latest. The personal representative has the opportunity to shorten this timeframe by either giving written notice to known creditors that claims must be presented within 60 days or publishing notice to creditors generally that claims must be presented within 90 days. With few exceptions, these time limits are absolute bars to recovery of debts from an estate.

Accordingly, best practices for a creditor include monitoring probate filings to see whether a personal representative has been appointed over a debtor's estate because the creditor may not necessarily receive actual notice of the appointment or a notice to present claims. If the one-year mark from the decedent's death is approaching and no personal representative has been appointed, a creditor in Utah must file its own petition for appointment of a personal representative together with its claim.

Statutory allowances for surviving spouses and children as well as various costs of estate administration, last medical bills, and taxes all have priority for payment over unsecured creditor claims. Moreover, the personal representative has until 60 days after the time for original presentation of the claim has expired to mail the creditor a notice of disallowance. If the creditor's claim is properly disallowed, the creditor must seek a court-ordered allowance by filing a petition for allowance within 60 days after the mailing of the notice of disallowance. If the claim is valid, the estate has sufficient funds, and the creditor complies with the law, its right to be paid will be preserved.