If your loved one has recently passed away, one of the first tasks will
be to determine whether he or she left behind a solvent or an insolvent
estate. What is the difference between these two types of estates?
If the decedent passed away leaving an estate (including real estate) that
has enough assets to pay all of their debts, taxes and expenses, then
the decedent died leaving behind a “solvent” estate.
What if the decedent passed away with very little assets? If the decedent’s
assets were insufficient to pay the debts, taxes and expenses of the estate,
the courts would say that the decedent had an “insolvent estate.”
Initiating Administration Proceedings
If your loved one died with an insolvent estate, the administration would
be started by filing a
Petition for Probate or by applying for
Letters of Administration; this would be done by the personal representative, or by one of the decedent’s
creditors in the proper court that has jurisdiction over the case.
Once the time limit for filing claims expires under T.C.A. 30-2-310, and
the estate is incapable of paying off all of its creditors, the personal
representative files a
Notice of Insolvency with the clerk. Then, a copy of this notice is sent via certified mail
to each creditor that filed a claim against the estate.
This notice can be mailed to the creditors by the personal representative,
the clerk, or by the
probate attorney for the estate.
The notice of insolvency contains an accounting of the decedent’s
assets that are under the control of the personal representative. It also
contains a proposed plan for distributing those assets according to T.C.A. 30-2-317.
All such notices to creditors contain the following language, “Objections
to this proposed plan of distribution must be filed with the clerk within
thirty days from the date of receipt of this notice,” according
to the Probate Committee of the Tennessee Clerks of Court Conference.
If one of the creditors objects the proposed plan within the 30 day period,
the clerk schedules a hearing between 15 and 30 days of the date the objection
was filed.
From there, the clerk notifies the probate attorney for the estate, the
personal representative, and all creditors about the hearing date. A decision
is made after the hearing, the distribution is made and the estate is
finally closed.
For further information,
contact me, David Whittaker, Attorney at Law for a complimentary case evaluation.
I would be glad to discuss your probate matter in detail.