Estate Debts and Claim Limitations Probate Texas
As part of taking an inventory of the estate, the executor must look for and validate the debts of the decedent’s estate and be aware of claim limitations.
Notice of Death Publication
If the estate you’re serving as executor is going through probate, you must typically publish a notice of death in the local newspaper where the decedent lived, but not in every locale where assets may have been located. The purpose of the notice is to inform potential creditors of the death. Depending on the state, creditors have three to nine months after publication to contact the estate concerning any death claims.
If a potential creditor misses the deadline, the estate is not obligated to pay the debt. However, debts to the federal government are often an exception to this rule.
Even if the estate is small enough to avoid going through probate, you may still wish to publish a notice of death. This can protect the estate from future debt claims, which can be problematic if the estate’s assets have already been distributed.
In Texas, the executor must publish a general notice of death in a newspaper of general circulation in the county where the decedent lived, announcing the executor's appointment and that creditors submit claims within the allowable period. The notice must be published within one month of executor appointment.
Within two months of being appointed executor, you must notify all known secured creditors of the decedent’s death, including those you could identify through a reasonably diligent search (i.e., a mortgage holder). The notification must be delivered by certified or registered mail, return receipt requested.
As executor, you can be held personally liable for failure to make any required notices.
You may also notify unsecured creditors such as credit card companies, setting their deadline for response to 120 days after receipt of notice.
Statute of Limitations and Claims Deadlines
Every state imposes a statute of limitations on debts, meaning that after a prescribed period of time passes, the debtor is no longer required to pay the debt. Typically, these time limits range from three years for open accounts, like credit cards, to ten years for contract debts, like installment loans.
When someone dies, these limitations may be extended to allow everyone ample time to get organized. This is called “tolling” the debt, but is not usually a significant factor in settling an estate since statutory limits are measured in years.
Statutory limits are also sometimes shortened because most states also have mechanisms for the estate to establish a time limit for claim submissions measured in months, not years. These shortened limits overrule any statute of limitations.
In Texas, creditors can submit claims against the estate until the estate is closed. However, if an unsecured creditor received a copy of the notice from you, the executor, then that creditor has 120 days from receipt of the notice to make a claim.
Texas maintains a four-year statute of limitations on general debts from their original due date. However, all such limitations are suspended for twelve months following the estate owner's death. In addition, the statute of limitations in Texas doesn’t automatically restart simply because a payment was made or a debt was acknowledged in writing.
Informal Debt Claims
Some debts will be easily discovered as you go through the decedent’s mail or are contacted by creditors concerning insurance premiums, credit card balances, utility bills, etc.
You’re not obligated to pay these debts unless the associated creditor makes a formal claim against the estate, but most executors will honor a decedent’s debts for services rendered. Failure to pay the decedent’s bills could result in damages to the estate, such as foreclosure or frozen pipes bursting.
Questions Concerning Probate and Real Estate?
Certain aspects of settling an estate, like handling an estate’s real estate holdings, may be outside your area of expertise or comfort zone. If in doubt, work with a professional.
If you have questions concerning probate and real estate in Tarrant, Parker, Wise, Collin, Denton, or Dallas County, contact David Pannell and Cities Real Estate. David has extensive experience helping families with their real estate needs before, during, and after the probate process.
David has been an agent/realtor since 2005. He has served as a United States Marines, City of Arlington police officer, and is a dedicated family man. You can trust him to put your interests first in any and all situations.
Call David today at (817) 797-9047 for help with your real estate and probate needs. You will be treated respectfully, and your requirements will be met efficiently and confidentially.
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NTREIS data last updated March 28, 2023.
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