In New York, the Executor or Administrator of an estate is obligated to address all claims presented within the prescribed time frame and in the form set forth by law. Failure to comply with the requirements of Surrogate’s Court Procedure Act (SCPA) §1802 and §1803 may be disastrous to the creditor. You are a creditor of an estate, if a decedent owed you money (debts) while he or she was alive. Examples of debts include: personal loans, credit card debt, bank loans, unpaid fees for services, medical bills, auto loans, rents, etc.
If you have a valid claim against a decedent, you must follow the procedures prescribed by law.
The Claim Must be Presented In Time
A creditor must present the claim within 7 months from the date that the Surrogate’s Court issues Letters (i.e., a document issued by a court authorizing a fiduciary (e.g., executor or administrator) to take control of a deceased person’s estate). Letters includes Letters Testamentary, Letters of Administration, Temporary Letters of Administration and Preliminary Letters.
If the claim is not presented within the 7 month period, the fiduciary will not be liable for any good faith distributions made before the claim was presented. In other words, if the fiduciary distributes all of the estate assets after the 7 month period has elapsed but before your claim was presented, the fiduciary cannot be held liable. On the other hand, the fiduciary is liable to a creditor that has presented a valid claim within the period and may be personally liable if he or she distributed the estate assets before the 7 month period has run. The same is true even if the claim is presented late, but assets remain undistributed in the estate.
The Claim Must be Presented in Proper Form
All claims against an estate of a New York decedent must be in writing, contain a statement of facts in support, and the amount of the debt. The claim must be presented by delivering a copy to the fiduciary in person or by certified mail return receipt requested. Failure to comply with these requirements may result in your claim being unenforceable in court.
To avoid unnecessary risk, it would be wise for a creditor to retain estate counsel to ensure that the claim is properly presented.