When the Person Who Owes You Money Dies

When someone who owes money dies, the law tries to wrap up payment relatively quickly so that the estate can pass to those who inherit and the recipients  move on. As a result, claimants usually have to submit claims within a relatively short time after a probate is opened (if there ever is a probate). If the executor or administrator rejects the claim, then a motion or lawsuit, depending on the procedure in the decedent’s home state, has to be filed quickly. Claims of interests in specific property of the estate, however, usually are not covered by the short notice requirements, as discussed in a recent case from Washington.

The estate proceeding was opened in Kittitas County, in central Washington, in late 2012. A few weeks later, a claimant filed a claim that he had an agreement to buy two half-acre lots in Pierce County, probably in or near Tacoma. He asked that the agreement be honored and he be allowed to pay the remaining $3,100 owing. The estate declined. Following the requirements in Washington, the estate’s response included a notice that the claimant had 30 days to file a suit “in the proper court.”

The claimant sued in Pierce County Superior Court, as it appeared at the time that Washington law required the suit there because that was where the land was. His claims included a demand that the contract be recognized and the sale completed, or, if that wasn’t granted, that he be reimbursed the money he had paid. When the Washington Supreme Court ruled in another case that it wasn’t required to file where the land was, the claimant had the suit moved to Kittitas County. The estate moved to dismiss the suit for not filing in the right court within 30 days.

The trial judge ruled for the estate, but the Court of Appeals reversed. It ruled that the claims to recognize and enforce the agreement were not covered by the 30 day requirement, on the theory that a the claim process was about general claims against the estate, not claims of preexisting property interests that limited the amount or value of property in the estate in the first place.

It also ruled, after reviewing several overlapping laws assigning jurisdiction, that the alternate claim for reimbursement was properly filed in the superior court. It said the question of which county the case was filed in was not as important as the level of the court.

All of this meant that the dispute will finally be resolved on the merits, 2½ years after the suit was originally filed. Sometimes, when an issue like this is decided incorrectly, the policy of getting matters settled quickly doesn’t get properly served.

If you think you have a claim against someone who died, or if you are handling an estate and someone files a claim that you have questions about, it may be a good idea to consult an attorney about how to pursue the claim. Some early advice about how to handle the technicalities may clarify the situation as one that can be resolved quickly, or at least framed in a way that can be decided promptly.

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