Challenging Claims to a Probate Estate in Missouri: Why Legal Counsel is Essential

When a loved one or friend passes away, the probate process in Missouri ensures that their estate is administered according to the law. However, this process can become complicated when claims are filed against the estate by creditors or other parties seeking some of the money or assets. Whether you are a personal representative, beneficiary, or another interested party, understanding how to challenge questionable claims is crucial to protecting the decedent’s legacy and your interests. Here is what you need to know and why having an experienced attorney by your side is invaluable.

A. Understanding Probate Claims in Missouri. In Missouri, creditors or other parties with financial claims against the decedent’s estate have a limited time to file their claims. Generally, claims must be filed within six (6) months from the date the estate’s personal representative publishes notice of probate in the local newspaper. These claims can include medical bills, credit card debts, unpaid loans, or other financial obligations the decedent may or may not have created.

The personal representative of the estate has a legal and fiduciary duty to review and either pay, negotiate, or dispute these claims. However, not all claims are valid, and some may be inflated, unsupported by evidence, or outright fraudulent. If a claim is not properly challenged, it could reduce the assets available to the decedent’s rightful heirs or beneficiaries.

In the context of probate in Missouri, secured creditors and unsecured creditors represent two distinct categories of individuals or entities that have claims against the estate of a deceased person. The primary difference lies in whether the creditor’s claim involves collateral (secured) or not (unsecured). This distinction affects the priority and manner in which their claims are handled during the probate process.

B. Secured Creditors. Definition: A secured creditor is one whose claim is backed by collateral – specific property that the creditor can seize or sell to satisfy the debt if the debt goes unpaid. Examples: (a) Mortgage lenders (secured by the property); and (b) Auto loan lenders (secured by the vehicle). Secured creditors generally have a higher priority than unsecured creditors. Their claims are paid first because they have a direct interest in the collateral. The personal representative of the estate can: (a) Pay the debt to keep the secured property within the estate; or (b) Surrender the collateral to the creditor; or (c) Negotiate a settlement or restructuring of the debt. If the collateral is sold and the net sale amount is insufficient to cover the debt, the remaining balance (deficiency) may become an unsecured claim against the estate. For example, if the deceased owned a house with a mortgage, the mortgage lender is a secured creditor. The lender can foreclose on the property if the estate fails to pay the mortgage.

C. Unsecured Creditors. Definition: An unsecured creditor is one whose claim is not tied to, or secured by, any specific collateral. These creditors rely solely on the decedent’s general assets for repayment. Examples: (a) Credit card companies; and (b) Medical services providers; and (c) Utility companies. Unsecured creditors generally have a lower priority in the payment process and are paid only after secured debts, administrative expenses, and certain other higher priority claims (e.g., taxes) are satisfied. If the estate lacks sufficient assets to pay all unsecured claims in full, they may receive only a partial payment on a pro-rata basis. If the estate is insolvent (i.e., debts exceed assets), unsecured creditors may not be paid at all. For example, if the decedent had a $5,000 credit card balance and no collateral to back the debt, the credit card company is an unsecured creditor and it must wait its turn after higher-priority claims are paid to see if any amount remains.

D. Grounds for Challenging Either Claim. Challenging a claim typically involves identifying flaws or legal deficiencies in the claim itself. Common reasons for challenging a claim include: (a) Lack of Documentation: The creditor fails to provide sufficient evidence of the debt; or (b) Expired Statute of Limitations: The claim is filed outside the allowable time frame; or (c) Fraudulent or Inflated Claims: The creditor’s claim is exaggerated or fabricated; (d) Settlement or Discharge: The debt was paid or discharged prior to the decedent’s passing; or (e) Improper Classification: Claims classified incorrectly, such as a secured claim presented as unsecured, may be disputed.

E. The Process of Challenging a Claim. Challenging a claim involves filing a formal objection with the probate court. This requires presenting evidence and legal arguments to demonstrate why the claim should be denied or reduced. The creditor will have the opportunity to respond, and the court will ultimately decide whether to allow or disallow the claim.

This process can involve complex procedural rules and legal standards. Missing a deadline, failing to properly present evidence, or misunderstanding probate laws can result in unfavorable outcomes. Because the probate process is intricate, and challenging claims requires knowledge of both probate law and civil litigation, here is why legal counsel is critical: (1) An attorney understands Missouri’s probate statutes and court procedures, ensuring all actions are taken correctly and on time; and (2) An attorney can help gather financial records, contracts, or other documents to refute unsupported claims effectively; and (3) If the dispute goes to a hearing, an experienced attorney can advocate persuasively on your behalf; and (4) A skilled lawyer ensures that the estate’s assets are preserved and distributed to the rightful beneficiaries; and (5) Executors and personal representatives can be held personally liable for mishandling claims. An attorney helps minimize this risk.

Challenging claims against a probate estate in Missouri is a serious matter that requires careful legal analysis and precise action. Whether you are a personal representative or beneficiary, having a seasoned attorney that considers probate a primary practice area guide you through this process ensures your rights and the estate’s assets are protected. If you are facing claims against a loved one’s estate, consulting with a qualified probate attorney should be your first step.

Todd Miller is a monthly contributor and regularly writes and speaks on various legal topics including estate planning, probate, and elder law. He formed the Law Office of Todd Miller, LLC, 1305 Southwest Blvd., Suite A, Jefferson City, Missouri in 2006. He was recognized as 2016 Adviser of the Year by GolfInc; and Golf Tax Consultant of the Year by Boardroom Magazine three times; and one of the “10 Best” attorneys by the American Institute of Family Law Attorneys; and one of the “10 Best” attorneys by the American Institute of Criminal Law Attorneys. Mr. Miller earned his juris doctorate degree from the University of Missouri School of Law in 1999 and graduated with honors from Lincoln University in 1991. You may find him at www.toddmillerlaw.com (573) 634-2838 or on Facebook, LinkedIn, and Twitter.