Minnesota Probate | Payment of Bills of the Deceased

In a Minnesota probate, the property of a decedent (the deceased person) passes at his or her death to the people named in the will (or Trust) or the decedent’s lawful heirs.  The property is also subject to a spousal elective share right, expenses of administration, and “rights of creditors”.  In this article, we are going to discuss the “rights of creditors” or how to properly pay the last bills of the deceased.

Payment of Creditor Claims

The claims provision of the Minnesota probate code “balance” the laws incentive to distribute the decedent’s estate against the right to be repaid lawful debts.  As an aside, the law is also clear that estate’s are supposed to be “wrapped-up” as quickly and efficiently as possible while still protecting the rights of those who claim an interest in the deceased’s property.

Below are some initial steps that a personal representative (often referred to as an “executor”) should take when dealing with debts of the estate:

1. Identify the Creditors:  the personal representative needs to make a list of all parties to whom the deceased may have owed money.  The names and addresses of the parties should be provided to the probate attorney so that proper notice of the existence of the estate can be given to the parties.
2. Identify the Nature of the Debt:   the personal representative should figure out if the bill is justified and valid.  If not, the bill can be contested or potentially reduced.
3. Provide a Mechanism for Resolving Disputes:  the personal representative should work with the probate attorney to discuss how to resolve any bill disputes;
4. Determine the priority of the various parties who may be entitled to some of the decedent’s property;
5. Determine a method of payment of the bills of the deceased.

Minnesota Law

The law associated with creditor claims, for the most part, is contained in Minnesota Statutes 524.3-801 through 524.3-817.  Please review the specifics of the law for details on payment of creditor claims.

The definition of what constitutes a “claim” is contained in Minnesota Statute § 524.1-201(8).  The law provides that “claims include liabilities of the decedent whether arising in contract or otherwise,” and/or “liabilities of the estate which arise after the death of the decedent including funeral expenses and expenses of administration.”

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