{"id":12325,"date":"2021-11-07T08:36:11","date_gmt":"2021-11-07T14:36:11","guid":{"rendered":"https:\/\/legaltalktexas.hammerle.com\/?p=12325"},"modified":"2025-06-18T16:53:40","modified_gmt":"2025-06-18T21:53:40","slug":"the-art-of-the-claim-arduous-probate-process-unfriendly-for-creditors","status":"publish","type":"post","link":"https:\/\/hammerle.com\/legaltalk\/probate\/the-art-of-the-claim-arduous-probate-process-unfriendly-for-creditors\/","title":{"rendered":"The Art of the Claim: Arduous Probate Process Unfriendly for Creditors"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Had Sun Tzu been a 21<\/span><span style=\"font-weight: 400;\">st<\/span><span style=\"font-weight: 400;\"> century lawyer rather than an ancient Chinese military strategist, he would have applauded the <\/span><a href=\"https:\/\/hammerle.com\/legaltalk\/estate-planning-and-probate\/types-of-probate-in-texas\/\"><span style=\"font-weight: 400;\">claims system used in Texas probates<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0 It is designed to build an almost impenetrable defense for the probate estate assets against a primary aggressor: creditors.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In Sun Tzu\u2019s own words \u201cThe supreme art of war is to subdue the enemy without fighting.\u201d By gosh, the Texas Estates Code makes sure that most creditors never even make it onto the probate battlefield.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What Is Probate?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A <\/span><a href=\"https:\/\/hammerle.com\/practice-areas\/estate-planning-probate\/probate\/\"><span style=\"font-weight: 400;\">probate is a court-ordered process<\/span><\/a><span style=\"font-weight: 400;\"> to settle the estate of a decedent. That includes handling creditor\u2019s claims for payment. No claim is payable unless the creditor follows the rules set out in the Texas Estates Code.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">How Does Probate Work With Different Types of Administrations?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The rules differ according to the type of administration.\u00a0 In a dependent administration, the administrator must seek court approval to take any action. Thus, the timetable and method to present, approve, disprove, and pay a creditor claim is strict. By contrast, in an independent administration the administrator (or executor) does not have to obtain court approval before processing a claim. The court does not even have jurisdiction to get involved with the independent claims process unless a lawsuit is filed.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The timelines start when the estate administrator qualifies to serve and receives \u201cletters of administration.\u201d\u00a0 Within one month, the administrator must publish a general notice to creditors and send a written notice to the state comptroller.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The next type of creditor notice is where things get interesting. The administrator may, but is not required to, give written notice to any individual unsecured creditor that he must present his claim within 121 days, or it will be barred.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The paths for an unsecured creditor then diverge by the type of administration. In a dependent administration, the unsecured creditor must present his claim directly to the administrator or file the claim with the clerk. If the creditor files a claim, then the form and content must meet the statutory requirements, including being supported by an affidavit. Otherwise, it is invalid, and the creditor loses.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u00a0In an independent administration, the unsecured creditor must deliver the claim to the administrator, file suit, or file the claim with the court. The claim does not have to be supported by affidavit.\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Secured creditors are handled a bit differently. Notice to them is required. Upon receiving the notice, the secured creditor is put to an election. He must choose between having the claim approved as a money claim, or having it fixed as a preferred debt and lien against the specific collateral. If he does not timely choose, then the default is that the debt will be treated as a preferred debt and lien.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">How Do Claims Work?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Once a claim is made in a dependent administration, the administrator has 30 days to allow or reject it. If the claim is allowed, it goes to the judge to approve or deny it. If the claim is rejected, then the creditor must file suit within 90 days or lose.\u00a0\u00a0\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Not so with an independent administrator. There is no time requirement for allowance of a claim, and a claim is not automatically barred if suit is not filed within 90 days.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Approved claims are placed in 1 of 8 classes for payment. Class 1 claims are paid first, then Class 2 and so on. If there is not enough money in the estate, then some approved creditor\u2019s claims will not be paid. Sun Tzu would say those creditors won the battle but lost the war.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Hammerle Morris can assist you with your <\/span><a href=\"https:\/\/hammerle.com\/practice-areas\/estate-planning-probate\/probate\/\"><span style=\"font-weight: 400;\">probate<\/span><\/a><span style=\"font-weight: 400;\"> and <\/span><a href=\"https:\/\/hammerle.com\/practice-areas\/estate-planning-probate\/estate-planning\/\"><span style=\"font-weight: 400;\">estate planning<\/span><\/a><span style=\"font-weight: 400;\"> needs. <\/span><a href=\"https:\/\/hammerle.com\/lewisville-attorney\/#form\"><span style=\"font-weight: 400;\">Schedule a consultation<\/span><\/a><span style=\"font-weight: 400;\"> with one of our <\/span><a href=\"https:\/\/hammerle.com\/lawyers\/\"><span style=\"font-weight: 400;\">experienced attorneys<\/span><\/a><span style=\"font-weight: 400;\"> today.\u00a0<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Virginia Hammerle is an attorney with Hammerle Morris Law Firm. <\/span><\/i><a href=\"http:\/\/www.hammerle.com\"><i><span style=\"font-weight: 400;\">\u00a0<\/span><\/i><i><span style=\"font-weight: 400;\">www.hammerle.com<\/span><\/i><\/a><i><span style=\"font-weight: 400;\">.\u00a0 She is entering her 40<\/span><\/i><i><span style=\"font-weight: 400;\">th<\/span><\/i><i><span style=\"font-weight: 400;\"> year in the practice of law and has handled many probate cases.\u00a0 She is Board Certified in Civil Trial Law by the Texas Board of Legal specialization. \u00a0 Contact <\/span><\/i><i><span style=\"font-weight: 400;\">legaltalktexas@hammerle.com<\/span><\/i><i><span style=\"font-weight: 400;\"> to receive her firm\u2019s newsletter.\u00a0<\/span><\/i><\/p>\n<p><i><span style=\"font-weight: 400;\">Correction:\u00a0 an earlier column misnamed Nancy Cruzan.\u00a0<\/span><\/i><\/p>\n<p><i><span style=\"font-weight: 400;\">This column does not constitute legal advice and is not a substitute for consultation with a licensed attorney.<\/span><\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Had Sun Tzu been a 21st century lawyer rather than an ancient Chinese military strategist, he would have applauded the claims system used in Texas probates.\u00a0 It is designed to build an almost impenetrable defense for the probate estate assets against a primary aggressor: creditors.\u00a0 In Sun Tzu\u2019s own words \u201cThe supreme art of war [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":12326,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1225],"tags":[685,41],"class_list":{"0":"post-12325","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-probate","8":"tag-estate-planning","9":"tag-probate"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Art of the Claim: Arduous Probate Process Unfriendly for Creditors - Hammerle Morris Law Firm<\/title>\n<meta name=\"description\" content=\"A probate is a court-ordered process to settle the estate of a decedent, which includes handling creditors\u2019 claims for payment. 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