If you have been appointed the personal representative of a Louisiana estate, you likely have responsibilities beyond simply distributing inheritances. Among a personal representative’s most important tasks is ensuring that the deceased’s heirs and creditors are aware that the estate has entered succession.
A Personal Representative’s Duty to Inform Heirs
Before a personal representative may disburse inheritances, they must first initiate succession proceedings by filing a petition in the parish where the decedent lived or the parish in which the non-resident decedent owned immovable real properties.
Estate Representative Requirements
If the deceased person has a valid will, you must notify the listed heirs that succession proceedings have begun. While you are not required to divulge any unnecessary information, you should inform the heirs about certain aspects of the estate.
Information to Communicate
The Personal Representative’s Duty to Inform Creditors
If the decedent passed away with unpaid debts, the personal representative may be required to inform creditors of succession. However, identifying and notifying creditors could present unexpected challenges, especially if you are not intimately familiar with the deceased person’s financial situation. You may have to check their bills; determine whether they have a mortgage or vehicle payment; and respond to payment requests from persons and entities purporting to be creditors.
When Creditors Can File Estate Lawsuits
A creditor may only recover an outstanding debt if they submit a notice of claim to the personal representative. The creditor’s notice of claim should contain certain information.
What a Creditor’s Claim Must Include
After receiving a notice of claim, the personal representative is entitled to evaluate its authenticity and merit. If the representative believes that the creditor claim is invalid or fraudulent, they may reject it. The creditor can then file a lawsuit.
Why a Creditor Might File a Lawsuit
If the personal representative acknowledges the debt as valid, they must still seek court authorization before using the estate’s assets to resolve the debt.
Time Constraints on Creditor Claims
Louisiana succession is a time-sensitive process. Creditors are subject to stringent statutes of limitations, which limit how long they have to file a claim against the estate.
Timeframes for Filing a Claim
The personal representative is responsible for ensuring that valid debts are paid. If the representative fails to inform creditors or does not pay the estate’s debts using the estate’s assets, creditors could pursue recompense through the estate beneficiaries’ inheritances, even if the inheritances have already been disbursed.
How Creditors Can Create Big Problems
Personal representatives are often friends or relatives of the decedent. Since many personal representatives are not attorneys, creditors often try to take advantage of their lack of legal expertise by submitting claims for phony or dishonest claims.
Even frivolous claims can have catastrophic consequences. While the personal representative is not responsible for paying creditors out of pocket, the estate may bear the burden of litigation. If the creditor is persistent in their claim, the representative may be forced to appropriate estate assets to fund a defense. Over time, the costs of protracted litigation can mount, depriving the decedent’s intended beneficiaries of their deserved inheritance.
Contact an Estate Planning Attorney