Many people mistakenly believe they can escape the payment of creditors upon their deaths by utilizing non probate transfers to their family and friends, or even to a charity. A non probate transfer includes transfers by right of survivorship or transfers by deed upon death. The recipient of a non probate transfer remains liable to the decedent’s probate estate for allowed claims against the estate if the probate estate is unable to satisfy those claims. There is an exception for spouses or minor children who petition the Court to be excluded from liability. A creditor can petition the Court to establish entitlement to non probate assets, and if granted, the creditor will be also entitled to reasonable costs and attorney’s fees from either the transferee or the probate estate of the decedent, or partially from each. A claim must be initiated 60 days after the final allowance of a claim or 1 year after the decedent’s death, whichever is later, or three years after the decedent’s death if the creditor is Medicaid. It is generally best to consult with an attorney as to how to best plan for distributions upon death, not only to protect the assets from creditors but to assure the intended beneficiaries are not left with a lawsuit.
Posted on: Wed, 29 Oct 2014 18:55:21 +0000
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