Detailed Answer
When you administer an estate in Hawaii, you must identify creditors, notify them, review their claims, and pay them in the order set by law. The personal representative handles these tasks under the Hawaii Probate Code (Title 560, HRS).
1. Notify Creditors
The personal representative must send written notice to known creditors and publish a notice in a local newspaper. This step triggers the deadline for presenting claims. See HRS §560:3-801 and §560:3-802.
2. Present Claims on Time
Creditors must present their claims within four months after the first newspaper publication of notice or within two months after personal delivery of notice, whichever is later. Late claims are barred unless the court allows them for good cause. See HRS §560:3-805.
3. Review and Allow or Disallow Claims
After the deadline, the personal representative reviews each claim. For valid debts, they file an allowance. If they dispute a claim, they must file a notice of disallowance. The creditor can petition the court to hear the dispute. See HRS §560:3-806 and §560:3-807.
4. Prioritize Payment of Claims
Hawaii law ranks debts in this order (HRS §560:3-803):
- Family allowances and funeral expenses
- Administration expenses (including personal representative and attorney fees)
- Expenses with federal or state tax preference
- Medical and hospital expenses of the last illness
- Wages due to employees
- All other unsecured claims
Pay higher-priority debts in full before moving to the next category. If estate assets fall short, distribute available funds pro rata within that class.
5. Final Distribution
Once you pay creditors according to these priorities, distribute any remaining assets to beneficiaries under the will or Hawaii’s intestacy rules. Keep detailed records and file a final account with the court.
Helpful Hints
- Track deadlines on a calendar when you publish notice.
- Send notices by certified mail to avoid service disputes.
- Keep copies of all claims, notices, and responses.
- Consult Hawaii Revised Statutes online at HRS Chapter 560.
- If you face complex disputes or insolvency, consider seeking professional counsel.
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney for guidance on your specific situation.