Is Probate record private - not with all your creditors disclosed during the Probate
In our last video, we discussed how much information is released in the initial inventory that must be filed within a couple of months of filing the initial petition for probate. Probate is not a private process no matter what you have heard.
Today we're going to discuss the creditor information that is part of most probates. In most States, a notice to creditors must be filed within a couple of months of filing the initial petition for probate. And heirs are usually surprised at their loved one's debts. Believe me, we see it over and over again. The notice to creditors is, well, just that. A notice to any creditor that might be out there that your loved one owed money to when they passed away. And if they have a claim against the estate, then they have a certain amount of time to come forward and make a claim against the estate.
Like I've said in past videos, probate is not private. And I don't understand why most people think of probate as a private process. It simply is not. And most, if not all, of your financial information becomes a matter of public record. And your creditor information is no different from your bank accounts and other financial information. I've mentioned in my previous two videos, that there are companies out there in the United States, who's entire business model is to monitor probates that are being filed around the United States, in every city, in every state.
Most of these companies are legitimate, and they're just trying to get their clients paid. And usually their clients consist of doctors, medical providers, and credit card companies. Sometimes even car companies. There are two things that you need to be concerned about regarding the notice to creditors.
First, we actually have to mail the notice to creditors to every single known creditor of your loved one. And two, we have to publish the notice to creditors in a local newspaper. That means anybody with a subscription to your local newspaper, or really just an internet connection can know exactly who are your loved ones creditors.
And if they're willing to go a little bit further, and believe me, there are many that do, all they have to do is match the case number that's in the newspaper with the court document from the court system, which is also available on, well you guessed it, the internet. And all of a sudden, anybody with an internet connection can have a complete financial picture of your loved one's assets, and their debts. Now I keep talking in my last two videos about nosy Nelly, and all she needs to do is get an internet connection to find out everything she wants about your probate.
However, when it comes to creditors, we are not just talking about nosy Nally. We're also talking about the legitimate companies that I've mentioned earlier, that are just trying to get their clients paid. But we're also talking about unscrupulous actors out there who prey on this information every single day to see what they can get from your heirs. If you have ever just been a little bit late on a credit card payment, I'm sure you've experienced the onslaught of phone calls from that credit card company asking for payment right now, for that money that you owe them.
The same thing goes for probates. However, because it's a probate and because your loved one probably had, well, more than one, two, or even three creditors, imagine the onslaught of phone calls to your home, or to your attorney's office regarding your loved one's debts. Now we're a law firm that does probate, so we're set up to do probate so we know exactly what to do when creditors call. And like I said earlier, most of them are legitimate.
And we actually work with them to get them paid out of the estate assets if they are legitimate. And that's the key, if they are legitimate. What can happen, and sometimes it does happen, especially if you're trying to do a probate on your own, is that well, those unscrupulous bad actors that I talked about will start calling as well. These bad actors know that the family is probably getting inundated by phone calls from other creditors that are legitimate, and if they can just sneak themselves in and get a few minutes, they may be able to con a loved one into paying them for a fictitious debt. That is why in most States there's actually a proper statutory procedure for getting creditors paid.
Once that notice to creditor is filed and published in a local newspaper, the legitimate creditors have X amount of days to come forward and file a claim against the estate. In Oklahoma it's usually 60 days. Usually if they don't file a claim within the statutory amount of days, then their claim can be barred forever. In other words, if they miss that timeframe to file a claim, then their claim is, well, it's basically extinguished.
The way a creditor claim usually works is the creditor files a claim against the estate. In most States with either the court clerk, or with the attorney that is representing the estate, representing the personal representative. Then, once the time has run for presenting claims, the attorney will sit down with their client, who's the personal representative, and go over each and every claim that has been filed against the estate.
If there is money in the estate to pay the claim, and the attorney and the personal representative believe that it is a legitimate claim, then the personal representative will sign the claim stating that they actually approve the claim. But that's not it. Just because a personal representative believes it's a legitimate claim, that creditor claim still must be presented to the court. In other words it must be presented to the judge for actual approval.
A creditor claim cannot be paid out of the estate until both the personal representative approves the claim, and the judge approves the claim. Once both the personal representative, and the judge have approved the claim, then and only then in most States can the personal representative issue a check from the estate bank account to pay the claim. And that is a very important distinction that I just made. The claim must be paid from the estate bank account. Creditor claims against the estate are not the debts of the personal representative, or the heirs.
That's important to remember. Debts against an estate are debts against the estate. They're not your debts. They are not your debts, and that's a really important thing to remember. If there is no money in the estate, then we have to try to figure out how to get them paid if it's possible. But if there's no money, well, there's no money. There's one more very important state regarding creditor claims. Once the personal representative has approved the claim, the judge has approved the claim, and the personal representative has actually written out a check and paid the claim, then the creditor must file a release of claim.
This is very important because you don't want that same creditor to sell the debt to somebody else, and come back three years, four years, five years later, and try to make a claim against the heirs of the estate, because it was not paid. Even if you do not care about all of your creditor information being out there, then at least think about the stress and the heartache it could put on your personal representative and your heirs, having to deal with all of these creditors.
How do you keep all of this personal and financial information and creditor information from being exposed during the probate process? Don't put your estate and your family through probate. It's that simple. A revocable living trust centered estate plan is usually the better and more private way to go. I know this is a lot to think about, so that is why we put together our free guide on estate planning. And I'll put a link in the description and in the comment section below for you to download. So click on the link below to get a copy of our free estate planning guide, that our clients use every day to get you started in the right direction. And to up your estate funding game even more, please check out this video up here, and this video up here. And if you liked this video, hit that like button and be sure to smash that subscribe button, and share it with your friends. You do not know how much it helps when you do that. Have a great day, and as always have an awesome week. Thanks for watchin'.