So, someone has died. What do we do next? Well, we don’t start giving away their stuff and that is what people intuitively start doing. They say, “I’m the son, I’m the daughter, I’m the beneficiary named in the will. Here’s the will, let’s start handing out stuff.”
That is the absolute wrong thing to do. The right thing to do is to go and open an estate with the clerk of court in the county in which the person last resided. Once you have someone with authority to manage the affairs of the estate, then there is a process you have to go through before you give away any property – in most cases.
So typically, what we want to do first after we open an estate is to figure out who our creditors are and anybody who we suspect will be a creditor, often will get a notice from you that says, “This person is deceased, here’s a copy of the notice we published in the newspaper and here’s your deadline to submit a claim if you have one.”
Now some debts you may recognize as valid and may not send them notice, but you will also need to publish a notice in the paper. That notice is going to run for four consecutive weeks and have a deadline of three months from the first filing. And that is going to be for unknown creditors, for people you could never discover with due diligence that may have a claim against the estate.
That gives those people an opportunity to come in and say, “Hey, estate, I am owed money because I did these services for this person on this date, and I’m entitled to this amount of money.” Then you can consider their evidence and decide if it’s a valid claim or not.
You need to do all of that before you give anything away to the heirs or beneficiaries. If you don’t, what you’re risking is personal, personal liability. So, when you go and give away property, you can’t go and get it back from that person. Then you find out you have a creditor claim and need to get the property back to sell, you could be on the hook for that if you’ve already given it away.
It’s very, very important that you just stop, and you don’t give away property, and you assess what the creditor situation is long before you start making distributions to the beneficiaries or heirs.