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Are All Claims Subject to the Creditor’s Claim Procedure?

Exceptions:

  • Costs of Administration
  • Claims re Property Ownership
  • Claims re Security Interests
  • Claims Against a Business Entity
  • Claims by IRS
  • Claims re Liability or Casualty Insurance
  • Claims for Specific Performance
  • Claims If No Administration or Publication of Notice to Creditors

    • The following claims do not require the presentation of a Creditor’s Claim:

    • Costs of Administration.
    • Claims re Property Ownership.
    • Claims re Security Interests.
    • Claims Against a Business Entity.
    • Claims by IRS.
    • Claims re Liability or Casualty Insurance.
    • Claims for Specific Performance.

    General Rule:  A Creditor’s Claim is required to be properly and timely presented for:

    • A debt of Decedent,
    • That is unsecured, and
    • That is reducible to money.

    Exceptions: The Creditor’s Claim procedure does not encompass the following claims:

    Costs of Administration

    “A debt that accrues as a result of the death of the Decedent, ie funeral and burial expenses, or that accrues thereafter as an expense of administration is not against ‘the deceased’, and a claim need not be filed in order for the [Personal Representative] to be authorized to pay a claim of this character.”  Estate of Wilson, 8 Wn.App. 519, 525 (1973); see also Estate of Armstrong, 33 Wn.2d 118 (1949).  If the Decedent is survived by a spouse or domestic partner, funeral expenses are a community debt, payable one-half by each.  Wittwer v. Pemberton, 188 Wash. 72 (1936); Estate of Lang, 97 Fed.2d 867 (9th Cir 1938).

    Examples of costs of administration (so long as they are incurred as a result of or after Decedent’s death):

    • Funeral or burial expenses.
    • Court filing fees.
    • Estate property storage fees.
    • Estate property insurance premiums.
    • Personal Representative’s commissions.
    • Personal Representative’s Attorney’s Attorney’s Fees;
    • Accounting fees.
    • Appraisal fees. etc.

    Claims re Property Ownership

    A claim as to ownership of, title to, or recovery of an asset in Decedent’s estate is not subject to the Creditor’s Claim procedure.  See Olsen v. Roberts, 42 Wn. 2d 862 (1953) (Claim by Decedent’s ex-wife for her share of community property awarded her in divorce decree and included in estate’s Inventory); Compton v. Westerman, 150 Wash. 391 (1928) (Claim by borrower’s Administrator for return of stock pledged as security for the loan).

    Claims re Security Interests

    A claim of a security interest in a specific asset in Decedent’s estate is not subject to the Creditor’s Claim procedure.  Examples:

    • A beneficiary’s interest under a Deed of Trust;
    • A mortgagee’s interest under a Mortgage;
    • A pledgee’s interest in securities; or
    • A perfected interest in specific tangible personal property, such as under a UCC financing statement.

    Estate of Hoffman, 14 Wn.App. 307 (1975), rev. denied 87 Wn.2d 1007 (1976) [Held: Mortgage is established as claim against estate without necessity of filing Creditor’s Claim to extent mortgagee seeks no deficiency judgment].  A secured creditor needs to file a Creditor’s Claim only if the claim exceeds the value of the security and the creditor wants to obtain the deficiency.

    Claims Against a Business Entity

    A claim against a business entity (other than a sole proprietorship) in which Decedent had any interest is a claim against the entity (eg, corporation, partnership, limited liability corporation, etc.) and not against Decedent and is not subject to the Creditor’s Claim procedure.

    Claims by IRS

    A claim by the Treasury Department for unpaid taxes etc. is not subject to the Creditor’s Claim procedure.  See 31 USC § 3713(b); US v. Summerlin, 310 US 414 (1940).  Note that this exemption covers neither the federal government generally nor the State of Washington.  Estate of Rhodes, 196 Wash. 618 (1938) [Held: State’s claim for care of Decedent in state hospital and not filed within statutory period is barred].

    Claims re Liability or Casualty Insurance

    A claim involving liability or casualty insurance not exceeding the maximum amount of the policy’s coverage is not subject to the Creditor’s Claim procedure.  RCW 11.40.060  The legislature did not adopt the four-month bar for the benefit of the insurance industry.

    Claims for Specific Performance

    A claim for specific performance (ie, for other than money damages) appears not to be subject to the Creditor’s Claim procedure.  See McCullough v. McCullough, 153 Wash. 625 (1929) (Claim to enforce Decedent’s oral contract to make a Will); Southwick v. Southwick, 34 Wash. 2d 464 (1949) (Same general situation); Baird v. Knutzen, 49 Wn. 2d 308 (1956) (Claim to enforce Decedent’s contract to convey land).

    Claims If No Administration or Publication of Notice to Creditors

    A long but old line of Washington cases ending in Estate of Curtis, 116 Wash. 237 (1921) holds that the Creditor’s Claim statute of limitations does not begin until the first publication of a Probate or Nonprobate Notice to Creditors.  This holding may apply only for prior law, for Decedents dying before 1998, which has been superseded by the relaxation of the requirement than a Notice to Creditors be filed.  No cases interpreting the new law on this issue have been found, so the application of foregoing holding to current cases, for Decedents dying after 1997, remains to be determined.