The probate process provides for the orderly resolution of a person’s financial affairs after their death. The probate process addresses whether the person died with or without a Will, who are the heirs, provides for the notification to creditors, the resolution of creditor claims, the orderly gathering and marshalling of assets, and the distribution of the assets.
Notice to Creditors
As part of the process of probating an estate, the personal representative must give notice to creditors of the decedent’s death. An estate cannot be legally or effectively closed if the personal representative fails to give notice to creditors. Michigan court rules require that the notice must include the following information: the decedent’s name and last known address, the decedent’s date of birth and date of death, the name and address of the estate’s proposed or actual personal representative, and the amount of time the creditor has to present his or her claims.
A personal representative must provide notice to the decedent’s known creditors and unknown creditors. The method of providing notice to creditors is dependent on whether the creditor is known or unknown. In the event that the personal representative of the estate knows the identity of a creditor (often by reviewing the decedent’s mail), the personal representative must a serve an individual copy of the published notice (or something similar) to the creditor.
Michigan law provides that knowledge of a specific creditor can be established by proof of actual or constructive knowledge on the part of the personal representative. Constructive knowledge can be shown by proof that the creditor’s identity was reasonably ascertainable if the personal representative had conducted an investigation of the decedent’s records from the two years prior to his or her passing and any mail that he or she received after passing. Finally, if a creditor’s identity is known, but his or her address cannot be discovered after diligent searching, the creditor’s name must be included in the notice to creditors that is published for the public.
The Michigan Court of Appeals in Besemer v. Fjerstad’s Estate emphasized that an estate cannot be properly closed if notice has not been given to all potential creditors. In Besemer, the plaintiff had been injured after she slipped and fell on the decedent’s property prior to the decedent’s death. After the decedent passed away, her personal representative failed to give notice to the plaintiff and the estate was closed. When the plaintiff filed suit, she discovered the decedent’s death and petitioned the probate court to reopen the estate. The case eventually made its way to the Court of Appeals where the court ordered the probate court to re-open the estate. Besemer demonstrates the importance of properly giving notice to creditors so you can avoid the headaches involved in re-opening an estate.
Providing the appropriate notice to creditors is a critical step in the effective administration of a probate estate. Contact the Probate Pro with any questions about giving notice to creditors or any other probate matter.
