Understanding Estate Creditors

There is nothing more painful than the loss of a loved one.  During this time, it is important to understand how to handle an estate.  In deciding how to best approach any estate matter, one must first understand how the estate creditors are paid.  Consider to whom payment should be made, in what order, if the claim is valid, and whether or not the estate has the funds to make the full payment requested. 

Typically, estate liabilities are paid in the following manner: reasonable funeral expenses, estate administration, taxes, medical, debts presented, judgments entered against a decedent as well as any other claims.  If there is not enough money to pay all valid estate creditors, a document entitled, “Notice to Limit Creditors” may be filed with the surrogate’s office. 

It is important to note that all claims presented do not need to be paid.  It must be a valid claim for the estate to be required to make a payment.  A personal representative of an estate has three months after receiving a claim to accept or deny the claim. 

See Victoria Dalton, What You Need to Know About Estate Creditors, NJ.com, March 1, 2015.