While sometimes overlooked, one important goal of a New Jersey probate proceeding is to make sure that the valid debts of the person who died get paid from the proceeds of the estate.
In general, a creditor has a certain amount of time to file a claim against the estate for payment. The personal representative will then decide whether to pay or object to the claim.
If the claim gets accepted, then the claim will be paid at the final distribution before beneficiaries under the will collect any proceeds. Some claims, like funeral expenses, governmental obligations and administrative expenses, get paid as higher priority claims.
The personal representative has an obligation to accept valid claims and to object to claims that are improper, untimely or excessive.
A creditor’s disputed claim may require litigation
The law also has a process through which a creditor can initiate litigation if the personal representative rejects a claim. In many ways, this type of litigation will resemble a civil trial.
Creditor claims can be hotly contested. Sometimes, individuals, and even businesses and government agencies, may file a claim against the estate that the person who died legally did not owe. There may also be disputes about the amount of a claim.
These disputes are also often high stakes since, after all, every claim against an estate means the family will receive less at the final distribution. When claim is for tens or hundreds of thousands of dollars, a mistake can be costly.
This is why it is important for a new Jersey family to have the assistance of an experienced probate litigation attorney to help them evaluate their options and to develop an effective legal strategy for resolving these claims.