Statute of Limitations

A statute of limitation defines a period of limitation in which people have the right to bring certain types of legal action in court.

In estate settlement, a common example for statute of limitations is the amount of time that a creditor has to make a claim against an estate.

While statute of limitations laws vary by region or local rules, this legal term aims to provide a reasonable timeline to avoid creditors from making any claims many years in the future once the estate is settled and all funds have been distributed to beneficiaries by the executor.

Think of statutes of limitations like deadlines or allowable time periods for someone to take legal action. One event triggers a clock, and if that clock runs out, then certain legal actions can no longer be taken or presented.

The statute of limitations is important in probate when validating wills and filing notice to creditors.

How statute of limitations relate to will contests

Sometimes family members may contest late changes to a will, citing that the testator (person who made the will) wasn’t of sound mind or had been manipulated. This would usher in a will contest.

In order to contest the validity of a will, the person challenging it has to be either named in the will or have a direct interest in the estate of the decedent. If the interested party wants to bring a claim to probate court, they must do it within the statute of limitations, which varies from three months to two years.

There are several reasons why a decedent’s will might be contested. The testator could have been incompetent when drafting the will, or they could have been subject to undue influence.

1. Incompetency - In order for a will to be valid, the testator must have been competent at the time they signed the will. This means that they were at least 18 years old and held testamentary capacity, meaning they had the legal and mental ability to draft a will. In probate court, there is an assumption that the testator was competent, so the contester bears the burden of proof.
2. Undue Influence - Individuals use undue influence to receive unintended gifts or inheritance from the testator. They exploit the weaknesses of the testator to convince them to revoke the previous will, and create a new one where the undue influencer becomes a substantial beneficiary. This causes the disinheritance of family members who the testator intended to provide for.

If a beneficiary decides to file a formal objection to a deceased individual's last will & testament due to any of these factors, they don’t have an unlimited time to bring the claim to probate court — that’s where the statute of limitations comes into play.

The statute does not start when the decedent passes away. It starts the day the will is probated, which can take anywhere from two to twelve months.

The statutes of limitation also vary from state to state. For example, in Pennsylvania the statute of limitations is 1 year from the date probate is opened, whereas in North Carolina you have up to three years to contest the will.

Even though the statute of limitations broadly works the same way in probate and criminal court, winning a case in probate court can be easier. This is because in criminal court, the claim has to be proven “beyond a reasonable doubt”, however in probate court, the claim has to be proven by “greater weight of evidence”, meaning you have to show that the claim is more likely than not the case.

Extensions for a Statute of limitations

If there are special circumstances, the statute of limitations can be extended by a judge.

If a beneficiary is a minor or incarcerated, for example, the statute of limitations begins when that person turns 18 or is no longer incarcerated. Another way the statute can be extended is if the executor does not send a legally required notice that the will has been probated to the beneficiaries or known creditors. In these cases, a judge could rule for an extension.

How statute of limitations relate to filing notice to creditors

The Statute of Limitations also applies for a notice to creditors. A notice to creditors is a public notice to the creditors or debtors of a decedent’s estate. This notice is always public and is published where it can get wide circulation such as in the newspaper (online or paper).

This serves as a formal notification to the creditors and debtors, letting them know that they must appear in probate court to file claims or make payments to the estate.

Because of the statute of limitations, this notice has an expiration. Depending on the state, creditors and debtors can have a few days to a few weeks to make their claims or payments.

For example, in North Carolina notices to creditors have to be published once a week for four consecutive weeks*, saying that claims must be filed before three months from the date of the first publication of the notice. If the creditors do not respond within the statute of limitations, their claims will be dismissed.

This means it is advantageous for executors to post notice early, because it gives an estate the highest chance to avoid having to pay a particular debt. Plus, not filing notice properly can leave executors open to liability (e.g. having to pay off a debt months down the road after inheritances have been distributed).

Jimmy, an 85 year old resident of North Carolina has just passed away. When he drafted his will, he named his two children, Sarah and Michael as beneficiaries of his entire estate.

In his will, Jimmy left his vintage car to his son, Michael. Although the car was being passed to Michael, Sarah had always wanted that car.

Once Jimmy passed away and the probate process began, Michael realized that the will had been changed, making Sarah the beneficiary of the car. Michael knew his father wanted him to have the car, so he suspected that Sarah used undue influence to coerce their father into changing his will.

Because the probate process had already begun and they are located in North Carolina, Michael has 3 years to contest the will and prove undue influence, or else the will remains valid and Michael's legal right to dispute the circumstance would formally expire.