This guide explains the responsibilities and duties of the Personal Representative in an Oklahoma probate with regard to creditors of the deceased.
Identifying Known Creditors
After being appointed by the court, one of the Personal Representative's first tasks is to identify all "known creditors" of the deceased. The term "known creditors" refers to all persons or entities known to the Personal Representative to whom the deceased owed money, be it credit cards with a balance, outstanding bank or car loans, unsatisfied mortgages, unpaid or past due utility accounts, expenses of last illness and hospital stay and other medical and doctor bills and the holders of any lawsuit judgments against the deceased. It also includes those creditors who are "reasonably ascertainable" to the Personal Representative, meaning creditors whose names and addresses can be determined by the Personal Representative through a search of the deceased's personal effects. Practical tip: if the Personal Representative believes there is even a possibility that the deceased owed a person or entity money, it is best to err on the side of notifying such person or entity. No harm can come from sending a copy of the notice to creditors. If the deceased did not owe the person or entity money, then such person or entity almost certainly will not file a creditor's claim against the estate. In the unlikely event an illegitimate claim is filed, then the Personal Representative can reject the claim as explained below. Either way, if a creditor does not receive proper notice, their claim will not be barred under the law. As a result, they can force the estate to stay open or later come after the property and assets of the estate distributed to the heirs or beneficiaries.
Issuing Notice to Creditors
Within two months of appointment, the Personal Representative is required to file with the court a Notice to Creditors. The notice must be in substantially the form set out in the probate statutes. The presentment date, i.e. the date by which creditors must come forward with their claims against the estate of the deceased, must be a date certain at least two months from the date the notice was filed. The Personal Representative is required to mail a copy of the notice to all known creditors of the deceased by first-class mail within 10 days after filing the notice. In addition, the Personal Representative has to publish the notice once each week for two consecutive weeks in a newspaper in the county where the probate is taking place.
Affidavit of Mailing or Non-Mailing
After mailing and publication as described above are complete, the Personal Representative files with the court an Affidavit of Mailing to evidence mailing of notice to the known creditors of the deceased. In the event the deceased had no known creditors, the Personal Representative files with the Court an Affidavit of Non-Mailing
Approving or Rejecting Claims
When presented with a creditor's claim, the Personal Representative has the option of approving or rejecting it. If the Personal Representative approves a claim, it is then presented to the probate judge for approval. Should the Personal Representative decide to reject a claim, the Personal Representative must mail notice of the rejection to the creditor. The creditor then has 45 days to challenge the rejection by bringing a lawsuit against the Personal Representative. Practical tip: If a claim is legitimate, it is in the Personal Representative's best interests to approve it. Suits on rejected claims can be costly and time-consuming, generating thousands of dollars in additional attorney fees and court costs and delaying closing of the estate. Oftentimes, creditors will negotiate down their claims. This is particularly true if other creditors have filed claims and there is doubt about whether the estate has sufficient funds to pay all of the claims.
Because the Oklahoma probate statutes prioritize creditors into categories of descending importance, much like a bankruptcy, the Personal Representative should NOT pay any claims until obtaining an order from the court. This can be a separate order for payment or can be included as part of the order approving the final accounting and decree of distribution. After all approved claims are paid in full, then whatever is left over goes to the heirs or beneficiaries of the deceased.
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