Collections in Probate: Some Pointers

Earlier this month, I taught a CLE seminar for the Probate & Estate Planning Section of the Memphis Bar Association.  The seminar was called “Collection After Death: Common Roadblocks and Strategies in Collection Before, After, and During Probate.”

As you probably know, Probate Law isn’t my focus, so I spent a good amount of time brushing up in preparation for this presentation in Memphis.  Over the next few weeks, I’m going to share some of the info I learned.

Here’s a starter: Did you know that there’s an absolute bar to filing claims against a deceased person 12 months after the date of their death? Look at Tenn. Code Ann. § 30-2-310.

So, notwithstanding the Notice to Creditor requirements of Tenn. Code Ann. § 30-2-306 and the associated deadlines imposed under the Code, this absolute 12 month statute of limitation still applies and can bar a creditor’s claim, even if the the creditor didn’t know the debtor was dead and even if the creditor didn’t receive any sort of notice of death or notice to file claims.

In fact, as a result of this strict 12 month statute of limitations on the filing of claims, if the probate case isn’t actually filed in that 12 month period, the creditor is simply out of luck. To be clear, as an example, if the probate case isn’t filed until 13 months after the date of death, there is no reason to issue a notice to creditors, as all of the creditors’ claims are barred.

The law says that the remedy for a creditor dealing with a deceased borrower is to commence their own probate case for the borrower during that 12 month period and, in that case, file a claim. Yikes. Who knew probate law was so tricky?