In Pennsylvania, as in other states, the death of an individual does not end that person's liability for debts. Creditors may make claims against his estate for repayment -- and the executor handling the estate is responsible for paying valid claims from the estate assets. Pennsylvania sets a one-year deadline to file creditor claims from the date of publication of the death notice. Under some circumstances, this statute of limitations can be "tolled," or suspended.
In a will, the will maker names an executor, who is responsible for paying creditors and distributing assets to the beneficiaries who are also named in the will. When the person dies, Pennsylvania requires the executor to file a petition with the probate court, requesting authority to administer the estate. The court grants this authority by issuing a document called the letters testamentary. The executor must then give public notice of this authorization in a court-approved publication once a week for three weeks. This publication gives legal notice to all claimants that the administration of the estate is underway; it also starts the clock running on the statute of limitations for creditor claims.
Statute of Limitations on Creditor Claims
State law bars creditor claims one year after the publication of a notice of the granting of the letters testamentary. If the time limit is about to run out on an old debt and the borrower dies, then the law extends that deadline to a full year after the date of death. If the statute of limitations on a specific claim would continue to run for more than a year, the death of the debtor limits that claim to the one-year deadline. Pennsylvania law makes an exception for any claim by the federal government, including a claim for unpaid income taxes; the IRS may claim unpaid taxes from an estate for up to 10 years after the tax was imposed.
Tolling the Statute of Limitations
Creditors can toll, or suspend, the statute of limitations by taking certain actions. For example, giving written notice of a claim to the executor tolls the statute, as does filing a request for an account of the estate with the probate court, or suing the estate and serving the complaint on the executor. In addition, if the creditor had a pending lawsuit against the deceased, he can toll the statute by substituting the executor as the defendant in the lawsuit. With any of these exceptions, creditors can pursue their claims beyond the one-year deadline.
Failure to Claim and Liens
Typically, the executor notifies all creditors of the debtor's death, indicating that he is now the court-authorized custodian of the deceased's accounts and assets. If a creditor does not file a claim within a year and executor isn’t aware of the debt and proceeds with distribution of the estate assets, Pennsylvania law provides that the estate will not be held liable for the debt. If a lien on real estate or personal property existed at the time of death, however, that lien remains valid for five years from the date of its filing or renewal by the creditor, or one year from the date of death, whichever is longer.
- Philadelphia Estate Practitioner Handbook: Claims By and Against the Estate
- Pennsylvania General Assembly: Title 20: Decedents, Estates and Fiduciaries
- Wolf Baldwin: Statutes of Limitations: Time Limits for Making Claims in Pennsylvania
- Justia.com: 2010 Pennsylvania Code Title 20 - DECEDENTS, ESTATES AND FIDUCIARIES Chapter 33 - Administration and Personal Representatives 3385 - Limitation upon claims.
- American Bar Association: Select Issues in Estate and Trust Administration
- IRS.gov: Internal Revenue Manual: Part 5. Collecting Process
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