A creditor of a deceased person is allowed to file a claim against an estate if his/her claim is timely filed with the surrogate’s office before an order barring creditors is made. But what happens if they fail to do this? Well, an option is for that creditor to chase any and all assets distributed to the beneficiaries by the estate representative. Our Chancery court has the jurisdiction to order the executor to produce a refunding bond from the beneficiary and if they fail to do so the creditor can sue both the beneficiary and the executor for the value of their unpaid claim.
The law is as follows on the proper closing of an estate and payment to creditors. Each beneficiary is required to give a refunding bond, conditioned upon his/her return of their share of the estate distributed to him or her (or a proportionate part thereof), ‘to discharge any debt which the executor or administrator may not have other assets to pay.’ This release and refunding bond, is given to the executor, for the benefit of creditor(s). The statute regards favorably the interest of creditors. If they (a creditor) fail(s) to present claims before an order barring creditors is entered, they cannot recover against the executor who has acted as required by law; but they still have a remedy against beneficiaries and estate assets distributed to them before and after a final accounting is approved.
To discuss your NJ Estate Administration matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing consultations if you are unable to come to our office.