Detailed Answer
When you serve as a personal representative (executor) in a Michigan probate estate, you must identify, notify, and pay creditors before distributing assets to heirs. The Estates and Protected Individuals Code (EPIC) sets strict notice requirements and deadlines.
1. Identify Creditor Claims
Within 10 days of appointment, publish a notice to creditors in a local paper (MCL 700.3803). Send direct notice to known creditors within 60 days of appointment (MCL 700.3805).
2. Deadline for Filing Claims
Creditors have 4 months from the first date of publication to file a claim in probate court (MCL 700.3806). Late claims are barred unless the court excuses the delay for good cause.
3. Reviewing and Allowing Claims
Review each filed claim for validity. You may object to claims that lack proof or exceed their documented amounts. If you allow a claim, you must pay it from probate assets.
4. Priority of Payment
- Administrative expenses (attorney fees, court costs) have first priority (MCL 700.3807).
- Funeral and burial charges come next.
- Costs of last illness.
- Secured claims (e.g., mortgages) follow, up to the value of collateral.
- Unsecured claims pay last, pro rata if the estate lacks sufficient funds.
5. Distribution After Claims
After paying approved claims, distribute remaining assets to beneficiaries under Michigan’s intestacy scheme or under the will. You must file a final accounting with the court showing all payments and distributions.
Key Statutes:
- MCL 700.3803 (Notice to Creditors)
- MCL 700.3805 (Notice to Known Creditors)
- MCL 700.3806 (Statute of Limitations on Claims)
- MCL 700.3807 (Priority of Claims)
Helpful Hints
- Keep a detailed calendar of notice and filing deadlines.
- Maintain organized records of all creditor correspondence and proofs of claim.
- Confirm the validity and amount of each claim before payment.
- Consult the probate court clerk for local procedural rules.
- Consider hiring a probate attorney for complex estates or disputes.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney to address your specific situation.