Six Limits on Claims in Trusts and Estates

May 19th, 2014 - Michael T. Kleps

As an estate attorney advising trustees, executors, beneficiaries and creditors, there are some important procedural limits on claims I deal with regularly.  Below I have reviewed the top six ways claims can be barred and often are barred during Estate or Trust Administration.

Notice to creditors

When someone dies, creditors have two years to pursue their claims against that person’s estate.  I advise Executors, Trustees and Surviving Spouse’s to publish notice to creditors in a newspaper and give known creditors actual notice of their right to file a claim against the trust or estate.  When this notice procedure is done properly, unknown and known creditors have only four months from the date of publication to file claims.

Notice of Probate and Appointment of Executor 

 Occasionally, family members or friends of a person who has died bring a Will Contest.  I advise Executors to give notice of Probate and the Appointment of an executor to anyone who may Contest the Will.  When a will is admitted to court through a probate proceeding and a person receives proper notice of this, then a Will Contest is barred after four months from the date the Will was admitted.

Rejection of Creditor Claim

If an Executor or Trustee believes a creditor claim is invalid and rejects it that creditor must file a lawsuit against the Executor or Trustee within 30 days of service of the rejection.

Declaration of Completion

When an executor has completed the administration of an estate they may serve a declaration of completion on interested parties.  Those parties have 30 days to object to the closing of the probate.  After that period the filed declaration of completion is considered a final and binding court decree.

Trustee’s Accounting Act

A trustee often has to make difficult decisions about how to disburse and manage trust funds.  A trustee may present an accounting for court approval and under RCW 11.106, an accounting approved by the court is binding and final – meaning a beneficiary cannot later object to it.  This is so even as to incompetent, unborn and unascertained beneficiaries.  In one recent Division II court of appeals decision (Anderson  v. Dussault dated October 1, 2013), the court barred a beneficiary from objecting years later to court approved payments made by a trustee, even though she was only six years of age when it was approved.   

Family Homestead Award

Under RCW 11.54 a surviving spouse or child may petition for a family award of up to $125,000 of the value in estate real estate.  This amount can be exempt from creditor claims and may take priority over intestacy rules (if there is no will) or bequests in the Will.

Note – Special Representative

Under RCW 11.96A.250, any party may petition the court to appoint a special representative to represent a party who is a minor, whose address is unknown or who is incapacitated.  If an executor or trustee wishes for the above groups to be bound by a court order then it may be necessary to have a Special Representative appointed to accept notice and advocate for the absent party.

Disclaimer: This article and blog are intended to inform the reader of general legal principles applicable to the subject area. They are not intended to provide legal advice regarding specific problems or circumstances. Readers should consult with competent counsel with regard to specific situations.

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