Question: I understand that a creditor only has a limited period of time to make a claim against an estate of a decedent, or such claim is forever barred (generally 6 months after the date of the decedent’s death). What is the statute of limitations for creditors to make a claim after my death if I utilize a revocable trust as my governing estate planning document? Answer: Under Maryland law, the Maryland Trust Act (now in effect) provides a Trustee the same 6 month limitations period that a Personal Representative has in the administration of the probate estate. There are, however, in certain situations, specific procedural requirements that must be adhered to in order to fall under this protective statute, in some cases requiring a publication of notice. Utilizing a revocable trust as the controlling dispositive document has historically offered number of advantages to a Will, such as (if done right) the avoidane of probate. However, one distinct advantage to probate has been the finality of the creditors claim period for the Personal Representative who wants to close the estate as soon as practical and make distributions of estate assets. With no probate, the statute of limitations on creditors’ claims against a decedent’s trust exceeds the 6 months period (generally 3 years). Comment: For some folks, it may make even more sense now to utilize a Revocable Trust as the governing estate planning document. It is still important to look at the entire situation because everyone’s situation is unique.
ABOUT STEVE SHANE
Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts and charitable trust. He is also experienced with drafting documents for business planning, the incorporation and application for exemption for Private Foundations and the administration of decedents’ estates. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.
WASHINGTON | BALTIMORE | FREDERICK | PHILADELPHIA | WILMINGTON | VIRGINIA | NEW YORK