Finding Estate Debts (WV)

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As part of taking inventory, an estate executor must look for and validate the debts of the decedent's estate.

Notice of Death Publication

If the estate is going through probate, the executor must typically publish a notice of death in the local newspaper where the decedent lived (see Sample Estate: Task - Publish Notice of Death). The purpose of this notice is designed to inform potential creditors of the death, and while details vary from state to state, creditors typically have 3 to 9 months to contact the estate about any debt claims. If a potential creditor misses the claims deadline then the estate would not typically have a legal obligation to pay the debt (see Sample Estate: Task - Debt Claims Expired). Note that debts to the federal government are often an exception to this rule.

Even if the estate is small enough to avoid probate in WV, the executor may still wish to publish a notice of death, to protect the estate from future debt claims, which could be quite problematic if the estate assets have already been distributed.

WV Specifics

In West Virginia, the estate must pay the court clerk $20 to publish a Notice of Administration of the Estate once per week for 2 consecutive weeks, announcing the executor appointment and notifying creditors that they have 60 days from the date of first publication to make any claims. This notice will be published within 30 days of the executor filing an estate appraisement, or if such an appraisement is not filed, then within 120 of the executor appointment.

The executor must make a diligent search to determine the names and addresses of creditors who are reasonably ascertainable, and send a copy of the above notice within 60 days after its first publication (notification is unnecessary if the creditor has already filed a claim or been paid in full).

The executor should also send a copy of the notice in the same time period to any surviving spouse, all heirs, and all trustees of any decedent trusts.

See WV Code § 44-1-14A.

Informal Debt Claims

There are certain debts you will quickly discover as you go through the decedent's mail, or are contacted by creditors, such as insurance premiums, credit card balances, utility bills, and so forth.

If desired, you can also run a credit report on the deceased, perhaps discovering debts about which you would otherwise be unaware. You may be able to get the credit report for free if and when you notify the credit reporting agencies of the death.

You don't necessarily have to pay any of these debts unless the associated creditor makes a formal claim against the estate, potentially in response to the notice of death, but most executors will opt to do so in an attempt to "do the right thing". Moreover, failing to pay some of these ongoing bills may result in unwarranted harm to the estate (such as foreclosure or frozen pipes bursting): see Resolving Debts: Ongoing Bills.

In any case, these bills will likely continue to arrive over time, so it will likely be several months before you have a complete picture of all debts.

Statute of Limitations and Claims Deadlines

All states impose statutes of limitations on debts, meaning that after a certain amount of time passes from a debt's due date, the courts can no longer require the debtor to repay the debt. Typically, these time limits range from 3 years for open accounts (such as credit cards) to 10 years for contract debts.

When someone dies, these statutory limitations are often both extended and shortened. They can be extended in that the expiration period is often put on hold for a few months, so that everyone has a chance to get organized and sort things out. This "hold" is officially called "tolling" the debt, but is not usually a major factor since statutory limits are measured in years.

However, statutory limits are also shortened in that almost all states have mechanisms for the estate to establish a time limit for claim submissions measured in months, not years, and these shortened limits overrule any statute of limitations (in other words, even if a statute of limitations implies that a debt would still be enforceable, it will not be enforceable if the estate limits have kicked in). The section above on Notice of Death Publications explains how the estate can limit the exposure to debts.

Note that debts which become time-barred (i.e., become unenforceable due to the statute of limitations), are considered "cancelled" by the IRS, and generate a taxable event, which the creditor may report to via a Form 1099-C (see IRS: Taxes on Canceled Debt).

WV Specifics

In West Virginia, creditors have 60 days from the first publication of the Notice of Administration of the Estate to make any claims (this deadline does not apply to secured debt, such as a mortgage).

If a creditor can prove he or she had no notice of the deadline and attempts to make a claim beyond the 60-day deadline, the debt should still be honored if the claim is valid in all other respects and the estate has funds remaining to pay it (see WV Code § 44-2-26).

Within these limits, West Virginia maintains a 5-year statute of limitations on open account debts, and 10 years on contract debt (see WV Code § 55-2-6). Contracts for sale are handled specially according to the Uniform Commercial Code, and have a 4-year limit (see WV Code § 46-2-725). Statute of limitations are calculated from original due date or most recent payment, whichever is later, and no claim whose statute of limitations has been exceeded may be enforced against an estate (see WV Code § 44-2-12).

The executor will not be held personally liable if, at least 6 months after executor appointment, he or she has paid all known debts in full or has reserved enough money to do so, and makes distributions to heirs (see WV Code § 44-2-23).