Claims In Probate — In General
Claims in Probate are debts of the Decedent which are owed at the date of death or which arise after death or during the course of administration. To be “allowed,” claims must be either paid by or “filed” with the representative. “Filing” is defined very loosely. Mailing of a bill to the Decedent and receipt of the bill by the representative can be adequate “filing.”
Not very long ago, a representative only had to publish against claimants, and if they did not file claims with the Court, the claims were barred. That changed in 1988 with the decision in Tulsa Professional Collection Services, Inc. v. Pope. The United States Supreme Court held that due process requires a representative to make a reasonable effort to determine creditors of an estate and to give them actual rather than constructive notice. The representative cannot close his eyes to known or reasonably ascertainable creditors, publish for claims, and bar those claims based solely on the publication. Actual notice must be given to known or reasonably ascertainable creditors.
After that decision, §18-12 of the Probate Act was amended to comply with the ruling. That section now provides that a claim is barred if one of the following is true and if the creditor does not file a claim:
- Actual notice is given to a known creditor pursuant to §18-3.
- Notice of Disallowance is given to a creditor pursuant to §18-11.
- Notice is published and the claimant is not known to or reasonably ascertainable by the representative.
Regardless of any other circumstances, all claims against an Estate are barred two years after the date of death whether or not Probate has been instituted. This limitation period can be used in connection with assets (often real estate) when the heirs or legatees do not intend to sell the assets and are willing to wait out the longer claim period to obtain clear title.
Classification Of claims
Claims are divided into classes:
- First Class Claims are funeral and burial expenses (paid by any person), expenses of administration, and statutory custodial claims. Interest on funeral and burial expenses accrues at 9% beginning 60 days after issuance of letters of office to the representative of the decedent’s estate, or if no such letters of office are issued, then beginning 60 days after those amounts are due.
- Spouse Award and/or Dependent Child’s Award.
- Third Class Claims are debts due the United States.
- Fourth Class Claims are for money due employees of the decedent of not more than $800.00 for each claimant for services rendered within 4 months prior to the decedent’s death and expenses attending the decedent’s last illness.
- Fifth Class Claims are for money and property received or held in trust by decedent which cannot be identified or traced.
- Sixth Class Claims are debts due the State of Illinois and any county, township, city, town, village, or school district located within Illinois (includes Real Estate Taxes).
- Seventh Class Claims are all other claims.
Each class of claims must be paid in full before paying any claims in the next class, and a class of claims is paid pro-rata if there is not enough money left to pay the class in full. Where all claims will not be paid, the representative may have to notify claimants of the same or lower classes in order to afford due process to and avoid prejudice to those claimants.
The claim provisions appear simple, but problems do arise. The next two articles will explore some of those situations.
© 2000 by Cary A. Lind, all rights reserved