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Creditors’ Claims in Probate

The objectives of probate are to pay creditors and distribute assets according to the law and your loved one’s wishes. Before assets of an estate are paid, creditors may seek payment on debts. As a personal representative, you don’t want to pay a debt the estate does not legally owe. However, you also do not want to unnecessarily tie the estate up in lengthy proceedings with a valid creditor.

To notify potential creditors of their rights, the personal representative must publish notice of the death in a legal newspaper in whichever county has jurisdiction over the probate proceedings. The personal representative is also responsible for serving each known or identified creditor with notice.

A creditor asserts its claims by sending a written notice to the personal representative or filing a statement with the court. The estate has an opportunity to refute the amount, priority or validity of the creditors’ claims, and must notify the creditor of allowance or disallowance within the prescribed statutory time period. The creditor may file a petition to ask the probate court to permit a disallowed claim to proceed. Any claim about which the personal representative fails to provide notice is considered allowed.

Allowed creditors’ claims are paid in this order:

  • Costs and expenses of administering the estate
  • Funeral expenses
  • Taxes and other debts that are given preference under federal statutes
  • Necessary and reasonable expenses for medical, hospital and nursing home care associated with the last illness
  • Necessary and reasonable expenses for medical, hospital and nursing home care received by the decedent during the year prior to death
  • State taxes and debts given preference under Minnesota laws
  • All other creditors’ claims

An experienced Minnesota probate lawyer can guide you through the process to effectively and efficiently close your loved one’s estate.