Pre-death Creditors' Claims Under the Colorado Probate Code: Part I

• Publication year: 2001
• Pages: 81
• Citation: Vol. 30 No. 8 Pg. 81

30 Colo.Law. 81 Colorado Lawyer 2001.

2001, August, Pg. 81. Pre-Death Creditors' Claims Under the Colorado Probate Code: Part I

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81

Vol. 30, No. 8, Pg. 81

The Colorado Lawyer
August 2001
Vol. 30, No. 8 [Page 81]

Specialty Law Columns
Estate and Trust Forum
Pre-Death Creditors' Claims Under the Colorado Probate Code: Part I
by William H. Wiedemann

Presentation of claims in a decedent's estate proceeding can be an enigma under the Colorado Probate Code ("CPC").1 What triggers the obligation of a creditor to present a claim? How is a claim properly presented? Does a creditor without knowledge of death have the right to present an untimely claim? Lastly, if the court or the personal representative has actual notice of a claim is it a valid claim, or does the creditor need to strictly comply with the method of making a claim under the statute Only recently has there been some answers to these questions The purpose of this two-part article is to explore these issues.2

Part I reviews the statutory provisions, discusses the constitutional issues, and addresses the nature of the nonclaim statute. Part II, to be published in the September 2001 issue, will explore proper presentation of a claim, two recent Colorado cases that resolve a number of issues, and considerations for an attorney in probate practice.

Statutory Scheme

Notice to Creditors

CPC § 801(1) provides that the personal representative "shall" publish notice to creditors in some daily or weekly newspaper published in the county in which the estate is being administered. If there is no such newspaper, notice should be published in a newspaper of general circulation in an adjoining county. The notice itself provides that if no claim is made it shall be forever barred.3 However, such notice is not required if one year or more has elapsed since the death of the decedent. This is consistent with the one-year nonclaim period, which is discussed below.

CPC § 801(2) provides that the personal representative also may give written notice by mail or other delivery to any creditor. The form of such notice is to be the same or similar to that used for publication. However, unlike the published notice, written notice shall inform the creditor that its claim must be presented within the later of the time set in the notice to creditors by publication or sixty days from the mailing or other delivery of such notice, but not later than one year following the date of death. Again, this one-year provision is consistent with the nonclaim period. CPC § 801(3) provides that the personal representative shall not be liable to any creditor or to any successor of a decedent for giving or failing to give notice.4

Statutes of Limitations

CPC § 802 addresses limitation periods. CPC § 802(1) provides that unless waived, no claim that was barred by any statute of limitations at the time of the decedent's death shall be allowed or paid. However, CPC § 802(2) provides that the running of any statute of limitations measured from some event other than death or the giving of notice to creditors is suspended during the four months following a decedent's death. Lastly, CPC § 802(3) provides that with certain exceptions, the proper presentation of a claim under CPC § 804 (discussed below) is equivalent to commencement of a proceeding on the claim.

Nonclaim Statute

CPC § 803(1) provides that claims arising prior to death, however founded, are barred unless presented in a certain manner. As to creditors barred by publication, the claim must be made within the time set in the published notice to creditors. As to creditors barred by written notice, the claim must be made within the time set in the written notice. Finally, as to all creditors, the claim must be made within one year after death.

Manner of Presentation
Of Claim

CPC § 804 addresses the manner of presentation of claims. CPC § 804(1) provides that a claimant may either deliver or mail a written statement of the claim indicating its basis, the name and address of the claimant, and the amount claimed to the personal representative; or the claimant may file a written statement of the claim, in the form prescribed by rule, with the clerk of the court.5 The claim is deemed presented on the earlier of receipt of the claim by the personal representative or its filing with the court. Presentation is not necessarily invalidated by the claimant's failure to correctly describe the security, the nature of any uncertainty, and the due date of a claim not yet due.

CPC § 804(2) provides that a claimant also may present a claim by simply commencing a proceeding against the personal representative to obtain payment thereon. Time limits on proceedings to enforce timely presented claims are determined by CPC § 806(1) (discussed below) and not by CPC § 804(2).

CPC § 804(3) provides that on presentment of a claim, no proceeding thereon may be commenced more than sixty days after the personal representative has mailed a notice of disallowance. In the case of a claim that is not presently due or that is contingent or unliquidated, the personal representative may consent to an extension of the sixty-day period. On petition, the court also may order an extension of the sixty-day period to avoid injustice; however, in no event shall the extension run beyond the applicable statute of limitations. Any extension must be solicited within the initial sixty-day time period.

Allowance of Claims

CPC § 806(1) provides that on presentment of a proper and timely claim, the personal representative may mail a notice to any claimant stating that the claim has been disallowed Failure to mail such notice of disallowance within sixty days after the expiration of time for original presentation has expired is deemed to constitute an allowance....