by Abigail V. Poole
As the Personal Representative (Executor) responsible for administering the estate of a deceased family member or friend, one of your most important tasks is to determine the debts of the deceased and whether they can or should be paid as part of the estate settlement process. This is especially true if the estate may be insolvent because the deceased died with significant debt due to failure to pay income taxes or credit card bills, or the deceased was the recipient of Medicaid (MassHealth) long-term nursing home care benefits.
Massachusetts law governs the order in which debt is to be paid to the so-called “creditors” of the estate, and certain creditors take priority over others. If you improperly pay some creditors out of order as Personal Representative, you may be personally liable to pay those that should have been paid but were not.
Under Massachusetts law, general (unsecured) creditors have one (1) year from the date of death to file a claim against an estate. An example of a general creditor is a collection agency attempting to obtain payment on outstanding credit card debt. The collection agency must take specific action within the one-year period to legitimize the creditor’s claim for payment of the debt. If the creditor does not take the proper steps within that period, the creditor will be foreclosed from seeking payment from the estate. In other words, as Personal Representative you know that after the one-year anniversary date of the deceased’s death, creditors who have not taken the proper steps to legitimize their claims have lost their rights to enforce payment of the debt against the estate.
The COVID-19 pandemic has complicated this simple deadline. Under the Third and Fourth Updated Orders issued by the highest court in the Commonwealth of Massachusetts (the Supreme Judicial Court), the “pause” button was hit from March 17, 2020 through June 30, 2020 (106 days) on a number of such “deadlines”, including the creditor claims period applicable to estates. The button was “unpaused” as of July 1, 2020. What this means is the number of days remaining until the one-year claims period ends as of March 17, 2020 are added to the number of days remaining as of July 1, 2020. For example, if the deceased died on January 1, 2020, in normal circumstances the creditor claims deadline would be January 1, 2021. Due to the COVID-19 Order, the deadline is extended 106 days to April 17, 2021, and creditors have until that date to file claims against the estate. The Supreme Judicial Court may order another extension if there is a new surge of COVID-19 cases in the Commonwealth.
The extension of the creditor claims deadline impacts the timing of the other steps necessary to settle an estate. If the Personal Representative decides that an Account itemizing the income and expenditures of the estate should be filed with the Court in order to release the Personal Representative from liability, such filing will be delayed until the extended deadline passes. There may also be a delay in making final distributions to the beneficiaries of the estate.
If you are the Personal Representative of an estate in Massachusetts, keep in mind this COVID-19-related impact on the claims of creditors who may be owed money by the deceased, and on the timing of estate settlement activities, and follow the advice of your estate planning attorney regarding the payment of claims.
At Samuel, Sayward & Baler LLC, we counsel families on the legal and tax matters that are necessary after the death of a loved one. You can request a consultation regarding estate administration with Attorney Poole by telephone at 781-461-1020 or visit our website at https://ssbllc.com.
Attorney Abigail V. Poole is an associate attorney with the Dedham firm of Samuel, Sayward & Baler LLC which focuses on advising its clients in the areas of estate planning, estate settlement and elder law matters. She is an active member of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (NAELA). This article is not intended to provide legal advice or create or imply an attorney-client relationship. No information contained herein is a substitute for a personal consultation with an attorney. For more information visit ssbllc.com or call 781/461-1020.
© 2020 Samuel, Sayward & Baler LLC