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Court Rules Oral Notice is Insufficient Under the Probate Code

Often, when someone passes away, the property they leave behind creates an estate, which needs to be approved by the Court before it can be distributed. This process is called probate and Indiana has a number of statutes and rules to help fairly administer the estate and to protect the personal administrators, heirs, creditors, and other interested persons. One such statute requires that creditors of the deceased receive notice when the probate estate has been opened so that they have a fair opportunity to ensure their claim is paid before all of the assets are distributed amongst the heirs of the deceased. In a recent court decision, the Court of Appeals determined that notice under the statute must be actual written notice in order to fulfill the statutory requirements. The statute requiring notice specially states that “notice may be served by mail or by any other means reasonably calculated to ensure actual receipt of the notice by a creditor.” In reliance on this, when Samuel Tolley passed away, his personal representative’s attorney called First Merchants Bank to notify them that probate pleadings had been filed to open administration of the estate. In response to the phone call, First Merchants Bank faxed a letter to the personal representative detailing Tolley’s customer information and noting the date of death. Notice of administration of the estate was published, per statute, in December 2010 and January 2011, but First Merchants never received written notice from Tolley’s estate. As a result, First Merchants filed two claims against the estate in July 2011. Tolley’s personal representative argued that the claims should be dismissed because they were not filed in a timely manner. The bank argued that they never received actual notice and therefore their claims were properly filed. The trial court ruled in favor of Tolley’s estate and denied the claims as being untimely because First Merchants was told that Tolley died and that an estate was being opened. On appeal, the Court reversed the trial judge’s decision stating that the bare minimum of Due Process required actual written notice under the Probate statute. The Court stated that even though First Merchants had actual notice of Tolley’s death, the phone call did not meet the requirements of informing the bank of the time period for filing a claim. As a result, the banks claims against the estate were allowed. The Tolley case demonstrates the challenges that can arise in the probate process and the importance of planning ahead to chose the best possible personal representative to handle such challenges. In fact, taking a little time now to plan for the future can save your loved ones from the added stresses that come from handling an unorganized estate. Furthermore, an estate planning attorney can guide you through the steps to ensure the estate you leave behind never has to go through the tedious process of probate. For more information on preparing your estate plan or to determine the plan that is right for you, please call 877-877-LAW2 (5292) or 219-924-2427 to consult with one of our top estate planning attorneys.

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