Probate Public Notice and the Nonclaim Statute

In this post, I discuss the public notice requirement imposed by the probate process.

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The probate process is often looked upon with disdain and fear. Even when the process runs relatively smoothly, it can be expensive and time-consuming. Many people simply do not want to expend the energy required to complete the process.

In addition, probate proceedings are on the public record, meaning anyone can discover what happened during the probate process. In addition, the probate public notice requirement ensures that knowledge of the existence of the probate process is readily assessable.

Consequently, very little privacy is maintained and matters of property and money—areas of life traditionally considered personal and private—become open for anyone to see.

For these reasons, individuals making an estate plan often seek to avoid probate. They do this through a variety of methods—most notably through the creation of a living trust—through which their property is able to bypass the probate process entirely.

There is, however, one significant advantage to the probate public notice and the accompanying probate process: the nonclaim statute. The creditor protection this process offers prompts many estates to open probate, even where all property bypasses the process.

Probate Public Notice and the Nonclaim Statute

Providing probate public notice invokes the nonclaim statute. The nonclaim statue provides protection from the claims of the decedent’s creditors. After that time period has expired, the claims are barred. Any creditor who fails to make the proper claims during this period simply cannot recover money due, even if the claims are otherwise legitimate.

In Arkansas, the nonclaim statute bars creditor claims not made within six months of the probate public notice. Notice is generally provided by mailing notices to all known creditors and by informing the public of the probate process through an ad in the local paper. This ad must generally run for two weeks to satisfy the probate public notice requirements.

If the decedent’s estate does not provide proper notice, however, creditors generally have 5 years after the decedent’s death to file their claims. Therefore, providing proper notice helps close out the matter quickly and provides greater certainty to the estate and its beneficiaries. The nonclaim statute, therefore, provides great advantages.

Because of the nonclaim statute, it is often a good idea to open probate, even where the bulk of property is passed outside the probate process, including through the provisions of a living trust. This allows the estate to take advantage of the nonclaim statute, even where the probate court does not have jurisdiction over the decedent’s property.

Closing an Estate

Once probate closes, the probate court loses jurisdiction. While the appellate court still has jurisdiction, appeals are time-barred after a very short period of time. So, once probate closes and the appeal period ends, creditors are simply out of luck, regardless of whether the nonclaim statute has expired.

Creditors may still pursue the executor or the beneficiaries if proper notice was not given, but the process is often quite burdensome and lengthy for the creditors, particularly in comparison with the requirements of making claims in probate court.

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See Also:

The Arkansas Probate Process

Small Estate Probate