How to Handle Creditors’ Claims as an Executor or Trustee
May 10, 2023
Estate administration matters, such as handling creditor claims, can require significant time and attention from executors and trustees. Estate executors and trustees in Missouri may find it challenging to navigate the legal waters in estate administration situations.
As an estate executor or trustee, you need all the help you can get. You can count on me to help you navigate the complex waters of the legal system. I proudly serve the Columbia, Missouri, community with their estate administration needs. Individuals and families in Jefferson City, Fulton, and Booneville have come to rely on my years of experience and knowledge to help them through some of the toughest moments in their lives. Set up a consultation with to start moving forward.
The Role of an Executor or Trustee in Estate Administration in Missouri
In Missouri, the Missouri Probate Code governs the role of a trustee or executor to notify and search for claimants. The specific time limits for such notifications may vary depending on the circumstances, but the following are some general guidelines:
Notice to Creditors
The executor or personal representative of an estate must publish a notice to creditors in a newspaper in the county where the estate is being administered. This notice should be published once a week for three consecutive weeks. The first publication must be made within 20 days after the letter testamentary (document appointing the executor) is issued. The notice should state the name and address of the personal representative and that all claims against the estate must be in writing and filed with the court within six months after the date of the first publication of the notice.
Notice to Heirs and Legatees
The executor or personal representative must also notify all heirs and legatees (people named in the will) of the decedent. This notice should be given by certified mail, return receipt requested, within one month after the date of the appointment of the executor or personal representative. The notice should state the name and address of the personal representative and that any objections to the validity of the will must be filed with the court within six months after the date of the first publication of the notice to creditors.
Other Time Limits
In addition to the above time limits, other specific time limits may apply to certain assets, such as life insurance policies or retirement accounts. The trustee or executor should be aware of any such time limits and notify potential claimants as soon as possible before any deadlines for claiming such assets have passed.
Trustees and executors in Missouri need to take a proactive approach in notifying and searching for potential claimants, as failing to do so could result in the loss of assets or potential legal disputes. The specific time limits and requirements may vary depending on the circumstances, so consulting with a professional estate administration attorney for legal counsel and guidance is recommended.
Payment of Claims in Missouri
The following process outlines the payment of creditor claims in Missouri:
Notice to creditors. The executor or personal representative of an estate must publish a notice to creditors in a newspaper in the county where the estate is being administered. This notice should be published once a week for three consecutive weeks. The notice should state the name and address of the personal representative and that all claims against the estate must be in writing and filed with the court within six months after the date of the first publication of the notice.
Filing of claims. Creditors must file their claims with the court within six months after the date of the first publication of the notice to creditors. The claim should be in writing and include the amount and nature of the claim, the name and address of the claimant, and the date the claim arose.
Review of claims. The personal representative must review the claims and determine their validity. The claimant will be paid from the estate assets if the personal representative approves the claim.
Priority of claims. Certain types of claims are given priority over other claims. For example, funeral expenses and expenses related to estate administration are prioritized over general unsecured claims. Taxes and secured claims are also given priority.
Disallowance of a Claim in Missouri
In Missouri, a creditor’s claim may be disallowed for various reasons, including:
Failure to file the claim within the statutory time limit. Creditors must file their claims with the court within six months after the date of the first publication of the notice to creditors. It may be disallowed if the claim is not filed within this time limit.
Failure to provide sufficient information. The creditor must provide sufficient information to support the claim, including the amount and nature of the claim, the name and address of the claimant, and the date the claim arose. The claim may be disallowed if the creditor fails to provide this information.
Lack of standing. The creditor must have legal standing to file the claim. For example, the claim may be disallowed if the creditor is not a valid creditor or has no valid claim against the estate.
Contesting the validity of the claim. The personal representative or an interested party may contest the validity of a claim by filing an objection with the court. If the court finds the claim invalid, it may be disallowed.
Other reasons. The court may also disallow a claim for other reasons, such as if the claim is fraudulent or the creditor has engaged in misconduct.
Order of Payment of Expenses and Claims
In Missouri, the order of payment of expenses and claims in an estate is generally as follows:
Costs of administration. Expenses related to the administration of the estate, such as court fees, legal fees, and accounting fees, are given priority over other claims.
Funeral expenses. Reasonable funeral expenses are given priority over general unsecured claims.
Taxes. Taxes owed by the estate, such as federal and state income taxes, are given priority over general unsecured claims.
Secured claims. Secured creditors, such as mortgage holders or car loan companies, have a priority claim to the assets that secure their debt.
General unsecured claims. All other claims, such as credit card debts or medical bills, are paid in the order in which they were approved by the court or by agreement among the parties.
Personal & Professional Legal Counsel
Don’t face the legal system on your own, especially during this emotional time. You can count on David W. Walker Attorney At Law to be there for you every step of the way. Get the help you need from an estate administration attorney by setting up a consultation today.