Affirmative Defenses: Short Statute of Limitations for Claims Against an Estate

Short Statute of Limitations – Claims against an Estate

Certain defenses shield a defendant from liability even if all the allegations against them are true. A familiar one includes the statute of limitations. In Massachusetts, a special short statute of limitations applies when a creditor seeks to hold the estate of a decedent liable for a debt that was established during the lifetime of the departed. The purpose of this special short statute of limitations is to settle estates with expediency.

Commencing the Action, and Interpretation of the Statute

The short statute of limitations requires that an action based in contract against an estate, arising out of obligations that were purportedly established by the deceased during his or her lifetime, is subject to a one-year statute of limitations from the date of the decedent’s death. Massachusetts courts have interpreted the language of this requirement broadly. The term “creditor” includes one having a claim not only in contract but also in tort against the estate. Further, there is good law based on a prior version of the short statute of limitations that interprets the word “action” as including proceedings both at law (claims that seek money damages as a remedy) and in equity (claims that seek court-ordered action or restraint because money is an inadequate remedy).

A creditor of an estate must be careful to timely assert their claim against such an estate by following the correct procedure. If the person having committed the unlawful conduct dies, the plaintiff must bring suit against the personal representative of the estate within one year after the date of death. The plaintiff must be sure to commence the action in a court of competent jurisdiction and properly serve process on or notice to the estate within one year after the date of death.

Service

The personal representative of the estate has to be timely served with a copy of the complaint and court summons or accept service of these documents if the plaintiff opts to serve process. Otherwise, the plaintiff must timely file a notice with the proper registry of probate. The name of the estate, the name and address of the creditor, the amount of the claim, and the court in which the action has been brought should be stated in the notice.

Relief and Exceptions

Massachusetts provides certain relief from and exceptions to the short statute of limitations. If a plaintiff misses the one-year deadline, relief can be sought by a complaint in equity to the Supreme Judicial Court. For the SJC to enter favorable judgment to the creditor of the estate or the plaintiff against the estate of the deceased person, it has to determine that justice and equity require relief and that such creditor is not chargeable with culpable neglect in not timely prosecuting their claim.

A plaintiff must be sure to also file a notice in the proper registry of probate, stating the name of the estate, the name and address of the creditor, and the amount of the claim upon filing its complaint with the SJC. A judgment rendered by the SJC does not affect any payment or distribution made before the filing of the plaintiff’s complaint and notice. Relief from the short statute of limitations may not be necessary when an exception is provided.

The short statute of limitations provides three exceptions. One exception is for claims that are secured by a lien on property of the estate. For example, if a creditor has a mortgage on the debtor’s home, the creditor can still foreclose on the home even if the creditor does not file a claim against the estate within one year of the debtor’s death.

Another exception is for actions for personal injury or death against the personal representative of the deceased debtor’s estate, even if the action is brought more than one year after the debtor’s death. However, the creditor must bring the action within three years of the date the cause of action accrued. If the creditor is successful in the action, the judgment can only be satisfied from the proceeds of a policy of liability bond or liability insurance, if any. The general assets of the estate cannot be used to satisfy the judgment. If a personal representative has not been appointed, the creditor can still bring the action, but the action must be brought naming the decedent as the defendant. In this case, service of process must be made on the entity providing the insurance or bond.

Finally, there is an exception for claims that are based on the debtor’s death. For example, if a creditor is owed money for funeral expenses, the creditor can still file a claim against the estate even if the claim is not filed within one year of the debtor’s death.

Claims Pursuant to M.G.L. c. 118E

If a deceased person received medical assistance under Chapter 118E of the Massachusetts General Laws when the deceased was 55 years of age or older or while an inpatient in a nursing facility or other medical institution, the Division of Medical Assistance must be notified of the death. The DMA may then file a claim for recovery of the medical assistance costs from the estate of the deceased. The notice to the DMA and the DMA’s claim for recovery must be made in accordance with the provisions of Section 32 of Chapter 118E.

Conclusion

If you are a creditor of a deceased debtor, it is important to be aware of these exceptions to the one-year statute of limitations. If you have a claim that falls within one of these exceptions, you may still be able to recover your money even if you do not file a claim against the estate within one year of the debtor’s death.