Filing Creditor Claims Against the Estate or Revocable Trust

October 25, 2022
Filing  Creditor Claims  Against the  Estate or  Revocable Trust

Hawaii State Bar Association Collection Law Section
October 7, 2022 
9:00 a.m. 
1040 Richards Street 
Honolulu, Hawaii 96813

Michael Rudy founded MacDonald Rudy over 30 years ago. The law firm concentrates on fiduciary, trust and estate, and real property litigation. For over three decades he has litigated complex trust and estate matters and contested conservatorships involving some of Hawaii's largest private trusts and high-profile individuals and families in Hawaii.
I. INTRODUCTION 

  1. Failure to identify a proper claim; 
  2. Failure to promptly identify the fiduciary whether it be trustee or personal representative; 
  3. Complying with applicable short statute of limitations; 
  4. Assessing and determining pre- or post- death or administrative claims; 
  5. Assessing non-exempt and exempt non-probate transfers;
  6. Determining proper choice of forum to litigate efforts in creditor claims.  

A. Do You Have A Claim?  
B. Determine that the type of claim, whether it be pre-death, post-death, or administrative claim. 

  1. 560:3-803 All claims against either a decedent or decedent's estate, which arose before the death . Proceedings such as will contests, trust disputes, or other claims to specific estate or trust property or fiduciary conduct is not a claim for purposes of 560:3-803. This Section is typically straightforward and not usually a fertile ground to litigate. 
  2. Bearing in mind, however, claims can be absolute or contingent, liquidated, or unliquidated and still be pre-death claims. They may be found on contract or tort or other legal basis. 
  3. Claims that are not administrative but arise after death. Again, there are few litigated claims in such area, but claims such as a decedent’s personal indemnity, obligations of an estate, other such contribution claims would be an example. 
  4. Post-death claims are due four (4) months after it is due or 18 months, whichever is the first to occur. Publication does not bar a post-death claim. 
  5. Administrative claims must be adjudicated and paid before probate closes or prior to the trustee final accounting being submitted. 

Note
: Claim to enforce a mortgage, pledge, or other lien upon property is not a claim. A potential deficiency judgment will be a post-death, or possibly pre death unliquidated and contingent claim. 
constituted a valid debt against the estate that must also have been presented within the time limits of the nonclaim statute.”  
In re Est. of Hover
II. SHORT STATUTE OF LIMITATIONS 

Pro Tip
: If you are a known creditor or reasonably ascertained creditor, you are entitled to actual notice of the four (4) month bar date. If you get actual notice of the bar date, it is 4 months after the first published notice or 60 days after the delivery of the bar date notice, whichever is
later
. But if you do not get actual notice,
and
you are a known or ascertainable creditor, the bar date for a claim is 18 months. 
Pro Tip
Estate of Loder
Pro Tip
If a case is already filed in a court of appropriate jurisdiction, there is no need to file a proof of claim. 
III. WHERE TO FILE 

  1. Deliver the claim to the personal representative with an affidavit in support to file the claim.  
  2. Filing with the court with a copy to the personal representative. 

IV. FORM OF CLAIM  

  1. Hawaii Probate Rules. See Probate Rule 63, all supporting documentation not required. 

“A creditor seeking payment from the deceased shall present a claim by (a) delivering the claim, with an affidavit in support thereof, to the person”
Rule 63 - Presenting Claims
, Haw. Prob. R. 63 
...an attempt is made in this rule to keep any court-filed documents with respect to presenting a claim as minimal as possible by not requiring that all supporting documentation be attached, but only that the claim be supported by  affidavit. This rule does not prohibit the pursuit of claims by any other legal method.
Pro Tip
There is no law on procedure for filing claims against a trustee of a revocable trust. Suggest always to file a claim in the estate
and
with a trustee or Jane Doe trustee, if necessary, with the clerk of the court at small estates in the First Circuit Court for decedent’s domicile there at death.
V. WHEN TO FILE A LAWSUIT 
or
VI. WHAT ASSETS AVAILABLE? 
Pro Tip
Practitioners that represent creditors, should assume that the procedural timing of presentation of claims applies with equal force to trust. However, there ostensibly is the argument that after a timely presentation of claim is made against the trustee, that the 60-day period for denial by a trustee in the following 60-day claim to file litigation subsequent to denial is not applicable to a trustee revocable trust.  
available
Pro Tip
Non-probate transfers, particularly death bed type transfers, are vulnerable to be set aside as a fraudulent transfer as to present creditors. See HRS §651C-4. Bearing in mind that the creditor and their counsel comply with the probate statute of limitations. 
< Older Post Newer Post >

My Relative Just Died in Hawaii. I Do Not Live in Hawaii and I Have No Information on His Assets or His Estate. Please Help!

October 11, 2024
Lost a relative in Hawaii and unsure about their estate or assets? Our law firm helps mainland relatives navigate probate, asset discovery, and estate administration. Call us to start the process.

Avoiding the Black Sheep Sibling as Personal Representative, Trustee, Power of Attorney and Parental Caregiver by Michael D. Rudy, Esq.

June 13, 2023
It has always perplexed the Firm’s lawyers, why serious responsibility for an elderly parent’s welfare and estate is so often reposited in the weak link in the family. Parents are very protective of their ne'er do well child. That child frequently is unemployed and often lives at home with his or her elderly parents. Often these are the sons and daughters whom the other siblings (or the elderly parent) appoint with the most significant responsibilities. Do not forget elder abuse is a crime of opportunity and this is when parents may be at their most vulnerable to undue influence by an unscrupulous caregiver.