Serving as Personal Representative of an Estate: What is a “Reasonably Ascertainable” Creditor?

When probating an estate (i.e., distributing a deceased person’s assets), a personal representative is responsible for seeing that the process is carried out in accordance with the deceased person’s wishes and state law. Some very common questions often arise in this context: What exactly are the duties of a personal representative? What steps is a personal representative required to take in order to properly fulfill those duties.

The Florida Probate Code dictates the rights, duties, and responsibilities of being a personal representative of an estate. One of the many obligations that comes with the role of personal representative is the duty to notify creditors of the death of a debtor. This gives creditors the opportunity to satisfy the debt from the estate. Once the creditors are notified, they have a certain period of time to file a claim against the estate. Florida Statute § 733.2121(3)(a) says that “[t]he personal representative shall promptly make a diligent search to determine the names and addresses of creditors of the decedent who are reasonably ascertainable, even if the claims are unmatured, contingent, or unliquidated, and shall promptly serve a copy of the notice on those creditors. Impracticable and extended searches are not required.” Depending on the type of creditor, the statute of limitations to file a claim is either two years from the notice for “readily ascertainable” creditors or within a three month window for creditors who are not “reasonably ascertainable.” What does all of this mean? When does a search go from reasonable to impracticable? What is “readily ascertainable”?

Notifying creditors is not the simplest task. Some debts are much more easily ascertained than others. Credit card, loan, and mortgage debts, for example, are fairly easy to determine. In all likelihood, the bills come to the person’s home or email. The personal representative generally would not have a difficult time in figuring out the contact information of the lender to inform them of the death. These creditors are “reasonably ascertainable.”

Other estate creditors are not so easy to determine and find. This difficulty is mitigated by the limitations placed on creditors for collecting from the estate. A “reasonably ascertainable” creditor has two years from the date the estate’s “notice of creditors” is published in order to file its claim. But, if the creditor is not “reasonably ascertainable,” it has only three months to file its claim. The question then become how not “reasonably ascertainable” is defined and who the burden is on to prove that they are a “reasonably ascertainable” creditor.

According to Florida’s Second District Court of Appeals, creditors essentially have the burden of making themselves known. For example, in the case of Lubee v. Adams, 77 So.3d 882, (Fla. 2d DCA 2012), as personal representative of an estate, Ms. Adams notified all of the readily ascertainable creditors of the estate. Over a year later, Mr. Lubee filed a claim against the estate as a creditor and said he was well within the statute of limitations for filing his claim because he was a readily ascertainable creditor of the estate. Thus, he had two years to bring his claim and he was well within that time period.

Ms. Adams did not identify Mr. Lubee as a “reasonably ascertainable” creditor of the estate. According to the probate court, since he was not notified of the death of the debtor, Mr. Lubee had two options. First Mr. Lubee could have filed his claim within the three-month window open for all creditors. Second, Mr. Lubee could have filed for an extension of time within the two year window. Mr. Lubee did neither. Mr. Lubee, instead, filed a claim against the estate. Since the three months had passed, the court found that his claim was barred. If he had requested the extension of time as he was allowed to under the Florida Probate Code, he would have been required to prove that he was a readily ascertainable creditor. Had Mr. Lubee done so, he likely would have prevailed in his claim against the estate.

The decision in Lubee v. Adams shows that it is the creditor’s burden of proof to demonstrate that they are reasonably ascertainable creditors of the estate. On the one hand, this allows creditors who might have fallen through the cracks to bring successful claims against estates. On the other hand, the decision protects estates from claims by creditors that have been time barred, thus promoting the efficient administration of estates. While the courts have chosen not to specifically define “reasonably ascertainable,” they are clear about the burden of proof in such matters.

If you or someone you know is the personal representative of an estate and require help with esstate administration and fulfilling the duties of a personal representative, the lawyers at Chepenik Trushin LLP can help.