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  1. #1
    sue1anne is offline Junior Member
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    Disallowed claim against an estate - IN

    What is the name of your state (only U.S. law)? Indiana

    After waiting for payment of two IOUs against my father's estate, I received a letter today stating they were disallowed. The IOUs were written by my father, acknowledged as valid by the executor, and filed at the courthouse on March 10th. The notice to creditors was posted on March 20th. Today, August 6th, I received a notice they were disallowed. I received a second letter today stating "In order to amicably resolve this matter, I offer payment from the estate in the amount of $8,000 in exchange for full release of your claim. Your son, [name], will need to provide a consent to this payment amount."

    We had been told by the executor there was a 90 day + 15 day wait. Should we have been notified before that date, which I think was late June/early July? Why does my son, also an heir, need to agree to this? Why would I accept half of what my father intended to repay me? No mention is made of the estate not having enough funds, however I believe it should. My father had retired from military and civil service and had most of his medical paid. The executor told me all bills including the attorney fees had been paid and she was only waiting on a $250 VA check that might cover some of the $5,000 funeral expenses, which were also already paid.

    How do I fight a disallowed claim? Do I need to get an attorney in Indiana? I live in Oregon and I'm on unemployment and the executor - a relative who stands to gain by my disallowed claims - knows I will have a hard time fighting this financially. However, she has never once indicated there may not be enough to pay this debt.

    Thank you.
  2. #2
    justalayman is offline Senior Member
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    have you thought of asking why the claim was first, disallowed and then attempted to be negotiated?
  3. #3
    sue1anne is offline Junior Member
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    Quote Originally Posted by justalayman View Post
    have you thought of asking why the claim was first, disallowed and then attempted to be negotiated?
    Not yet. It was just received today and she typically does not answer my inquiries about the estate status. The last contact I had was in June. I'm nervous about the time limitations of filing to try to collect on it. The entire estate was listed at $50,000 initially when we were sent a copy of the will. There were stocks and CDs to be sold and multiple bank accounts. There are five heirs in the will including myself and the executor. I know the funeral expenses were $5,000, the attorney had worked about 15 hours, and there were no other creditors - my father didn't borrow from anyone but himself. There was a medical bill for the ambulance. Other than that I don't believe he owed anything else but administrative expenses, which is why I think there should be enough in the estate to pay the IOUs. He was religious about paying his bills each month and hated owing interest.
  4. #4
    anteater is offline Senior Member
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    I'm not surprised. If I were administrator, I'd probably put the squeeze on you, too, because:

    1) If I remember the background correctly, the IOU's resulted from your father using funds in a joint account. It wasn't as if you loaned money to him. As administrator, I would probably make an argument that, since it was a joint account, your father had the right to take the money and it wasn't a true debt. (Well, I'd make that argument as long as all the funds in the accounts were his.) Not saying that the court would accept that argument, but I think that it would have a chance.

    2) You aren't there.

    You're down to deciding what your bottom line is. Either be prepared to go to Indiana or retain an attorney there or do some more negotiating.

    I can only point you to the IN statutes on what happens on disallowed claims:

    http://www.in.gov/legislative/ic/code/title29/ar1/ch14.html

    Starts at 29-1-14-10 - about halfway down the page.
  5. #5
    sue1anne is offline Junior Member
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    Quote Originally Posted by anteater View Post
    I'm not surprised. If I were administrator, I'd probably put the squeeze on you, too, because:

    1) If I remember the background correctly, the IOU's resulted from your father using funds in a joint account. It wasn't as if you loaned money to him. As administrator, I would probably make an argument that, since it was a joint account, your father had the right to take the money and it wasn't a true debt. (Well, I'd make that argument as long as all the funds in the accounts were his.) Not saying that the court would accept that argument, but I think that it would have a chance.

    2) You aren't there.

    You're down to deciding what your bottom line is. Either be prepared to go to Indiana or retain an attorney there or do some more negotiating.

    I can only point you to the IN statutes on what happens on disallowed claims:

    [url=http://www.in.gov/legislative/ic/code/title29/ar1/ch14.html]Indiana Code 29-1-14[/url]

    Starts at 29-1-14-10 - about halfway down the page.
    This was not a joint account. This was for money borrowed on life insurance in which I was the beneficiary, and stocks he sold that he intended to leave me in his will. He made bad investments in his last year so he left two IOUs for $8000 each.

    Thanks for the 2nd comment. I needed to know if I could use an Oregon attorney or if I had to retain one in Indiana. I'll start looking.
  6. #6
    anteater is offline Senior Member
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    Quote Originally Posted by sue1anne View Post
    This was not a joint account. This was for money borrowed on life insurance in which I was the beneficiary, and stocks he sold that he intended to leave me in his will. He made bad investments in his last year so he left two IOUs for $8000 each.

    Thanks for the 2nd comment. I needed to know if I could use an Oregon attorney or if I had to retain one in Indiana. I'll start looking.
    I'm not disputing your Dad's intentions. It's just that it is a bit odd way of going about doing it, as opposed to revising his will.

    But I'm thinking of arguments that I would make to the court as the administrator's attorney. And I think that the arguments would at least have a shot of flying. At the same time, they might get shot down. I suspect that the administrator's attorney went through the same thought process and advised the administrator to make an offer rather than everybody spending a bunch in legal fees.
  7. #7
    justalayman is offline Senior Member
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    sue1anne;2619794]This was not a joint account
    .

    this is what you told anteater previously:

    I have an $8000 IOU he sent me about a year ago for some stocks he sold that we jointly owned.

    This was for money borrowed on life insurance in which I was the beneficiary, and stocks he sold that he intended to leave me in his will. He made bad investments in his last year so he left two IOUs for $8000 each..
    why would he owe you money because he borrowed money on his life insurance policy? That is his right and it would not result in him owing you money because of it. and why would he owe you money because he made bad investments. That is the risk of investing. You can win and you can lose. Unless he actually borrowed the money from you to invest with the promise it would be repaid, that would be fine but if you had joint investments, you both win or you both lose.
  8. #8
    sue1anne is offline Junior Member
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    Quote Originally Posted by anteater View Post
    I'm not disputing your Dad's intentions. It's just that it is a bit odd way of going about doing it, as opposed to revising his will.

    But I'm thinking of arguments that I would make to the court as the administrator's attorney. And I think that the arguments would at least have a shot of flying. At the same time, they might get shot down. I suspect that the administrator's attorney went through the same thought process and advised the administrator to make an offer rather than everybody spending a bunch in legal fees.
    Can I deduct some of my attorney fees for this from the estate, since this still has to do with change in my inheritance amount? The way the will was written, heirs will receive 10% each and she will get the remainder, so she stands to gain quite a bit if I don't try to collect on the IOUs.

    So, she can still disallow even after the 90 days + 15 was over? I'm looking at this statement, section C in Indiana:

    IC 29-1-14-19
    Payment of claims; bond or security of creditor; report of insolvency
    Sec. 19. (a) The personal representative at any time shall pay the claims as the court shall order if the claims are filed within three (3) months after the date of the first published notice to creditors or the period allowed under IC 29-1-7-7, if applicable, and the court may require bond or security to be given by the creditor to refund such part of such payment as may be necessary to make payment in accordance with this title.
    (b) Prior to the expiration of three (3) months after the date of the first published notice to creditors or the period allowed under IC 29-1-7-7, the personal representative, if the estate clearly is solvent, may pay any claims that the personal representative believes are just and correct, whether or not the claims have been filed. The personal representative may require bond or security to be given by the creditor to refund any part of the payment as the court may subsequently order. The personal representative, following all such payments, shall include them in the personal representative's next account and they shall be considered proper payments under this title if they are approved by the court as a part of the account.
    (c) Upon the expiration of three (3) months after the date of the first published notice to creditors or the period allowed under IC 29-1-7-7 and the final adjudication of all claims filed against the estate, the personal representative shall proceed to pay the claims that have been allowed against the estate in accordance with this title that the personal representative has not paid.
    (d) If it appears at any time that the estate is or may be insolvent, that there are insufficient funds on hand, or that there is other good or sufficient cause, the personal representative may report that fact to the court and apply for any necessary order.
    (Formerly: Acts 1953, c.112, s.1419; Acts 1975, P.L.288, SEC.27.) As amended by P.L.154-1990, SEC.11; P.L.118-1997, SEC.23; P.L.252-2001, SEC.22.
  9. #9
    justalayman is offline Senior Member
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    =sue1anne;2619808]Can I deduct some of my attorney fees for this from the estate, since this still has to do with change in my inheritance amount? The way the will was written, heirs will receive 10% each and she will get the remainder, so she stands to gain quite a bit if I don't try to collect on the IOUs.
    you pay for your attorney, The estate pays for the estate attorney. If she wants an attorney to advise her in a capacity other than as PR, she pays for her attorney.

    So, she can still disallow even after the 90 days + 15 was over? I'm looking at this statement, section C in Indiana:
    well, she needs to act on the claim. No claim is automatically approved so if she cannot disallow a claim after that time, she would also be restricted from approving it as well.

    Do you want to argue she cannot act on a claim after that time period?

    what the time limitations does is allow a creditor to seek the courts assistance to require the PR to act on a claim.
  10. #10
    anteater is offline Senior Member
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    Quote Originally Posted by sue1anne View Post
    So, she can still disallow even after the 90 days + 15 was over? I'm looking at this statement, section C in Indiana:
    You will need to ask an Indiana attorney about that. But I think that the applicable part of the Indiana statutes would be:

    IC 29-1-14-10
    Allowance; disallowance; expenses of administration
    Sec. 10. (a) On or before three (3) months and fifteen (15) days after the date of the first published notice to creditors, the personal representative shall allow or disallow each claim filed within three (3) months after the date of the first published notice to creditors by making appropriate notations on the margin of the claim and allowance docket showing the action taken as to the claim. If a personal representative determines that the personal representative should not allow a claim in full, the claim shall be noted "disallowed". The clerk of the court shall give written notice to a creditor if a claim has been disallowed in full or in part. All claims that are disallowed, or are neither allowed nor disallowed within three (3) months and fifteen (15) days, shall be set for trial in the probate court upon the petition of either party to the claim. The personal representative shall make an appropriate notation of any compromise or adjustment on the margin of the claim and allowance docket. If the personal representative, after allowing a claim and before paying it, determines that the claim should not have been allowed, the personal representative shall change the notation on the claim and allowance docket from "allowed" to "disallowed" and give written notice to the creditor. If a claim has been paid in full or in part, the creditor shall:
    (1) release the claim to the extent that the claim has been paid;

    and
    (2) give written notice to the clerk of the court of the release.
    (b) Claims for expenses of administration may be allowed upon application of the claimant or of the personal representative, or may be allowed at any accounting, regardless of whether or not they have been paid by the personal representative.
  11. #11
    justalayman is offline Senior Member
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    the statute appears to be written to allow a creditor to force the PR to act, nothing more.
  12. #12
    momm2500 is offline Member
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    life insurance

    1-father took a loan out on his own life insurance policy. he doesn't owe anyone any money for that esp. if he is the one that paid the premiums**************that is his and he is rightfully entitled to do that. if he wanted to, he could have cashed it out and you would not have received anything. so you are not entitled to anything that he borrowed against his own policy and the estate owes you nothing for it.
    2-he intended on leaving you stocks. well if he bought them and you did not, (and they were in his name not yours) then he has the right as owner of those stocks to do what he wants with them. if he cashed them in and spent the money..he has the right to do that since they were his and not yours.

    sometimes things change than what was indicated in a will.
    Last edited by momm2500; 08-07-2010 at 07:47 AM.
  13. #13
    sue1anne is offline Junior Member
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    Quote Originally Posted by momm2500 View Post
    1-father took a loan out on his own life insurance policy. he doesn't owe anyone any money for that esp. if he is the one that paid the premiums**************that is his and he is rightfully entitled to do that. if he wanted to, he could have cashed it out and you would not have received anything. so you are not entitled to anything that he borrowed against his own policy and the estate owes you nothing for it.
    2-he intended on leaving you stocks. well if he bought them and you did not, (and they were in his name not yours) then he has the right as owner of those stocks to do what he wants with them. if he cashed them in and spent the money..he has the right to do that since they were his and not yours.

    sometimes things change than what was indicated in a will.
    I think a lot of assumptions are being made. I didn't ask for the IOUs and I never said he owed me anything. I'm not upset he borrowed money from his insurance or made bad investments. Yes, some were in both our names. I had no dealings in them but he used my name to open accounts or buy additional stock. He just sent me papers and I signed. This was all of his own free will and choice. I never asked for any IOUs. He had them witnessed while he was in hospice by a nurse, so it's not like he didn't think it over making sure the process he followed would be legal. They IOUs don't state they are for lost stocks and borrowed insurance. That was my assumption. They could very well be for something else like running my business into the ground, borrowing money to pay his house payments or ???. He never said what they were for and I didn't open the letter until his death so it's not like I can ask him. I never kept an accounting of what he asked me for. I just tried to help him when he asked because he's my father.

    I'm not a greedy person trying to take advantage of an estate. My father left me something and I'm just trying to find out the legal process I need to take. Thank you for suggesting I need an Indiana attorney, that is the route I'm taking. The fact that they offered an $8,000 settlement means they at least recognize the IOUs, and that there is something in the estate and it's not intestate... at least up to that amount because I know her inheritance is "everything else" and she will not accept nothing.
  14. #14
    sue1anne is offline Junior Member
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    Quote Originally Posted by justalayman View Post
    .

    this is what you told anteater previously:






    why would he owe you money because he borrowed money on his life insurance policy? That is his right and it would not result in him owing you money because of it. and why would he owe you money because he made bad investments. That is the risk of investing. You can win and you can lose. Unless he actually borrowed the money from you to invest with the promise it would be repaid, that would be fine but if you had joint investments, you both win or you both lose.
    Well my father was much smarter than I was when it came to borrowing, repaying and wills. I have no idea why he gave me these IOUs, so I guess that was my mistake assuming. As I said, I never asked to be paid anything at all. He did borrow money from me to purchase some stocks and he lost all of that. I suppose that could be it but honestly I really have no idea.
  15. #15
    anteater is offline Senior Member
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    Easy... easy...

    You don't win anything making your case on an internet message board.

    Your cousin could:

    1) Be making a cold-blooded "let's see what sue1anne is willing to accept" offer, or

    2) Have conferred with the estate attorney and been advised that a disallowance isn't a sure-fire thing to prevail and to offer a compromise.

    In your earlier threads, I tried to stay away commenting upon the validity of your claims. Given the writings, I suspect that you have the stronger case, but I would not see it as a slam dunk.

    You are really at a decision point and you have to think about what your bottom line is. Do you put some money at risk and press it before the court? Or do you accept a compromise?

    Either way, I'd be interested in knowing what you decide and how it turns out.

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