Those familiar with estate administration wrongly assume notice publication only bars creditors in probate estates. In Missouri, notice publication is also a powerful and often overlooked way to prevent creditors from accessing a trust’s assets upon the death of the trust’s grantor.
Notice publications:
Missouri law allows a successor trustee to publish a notice in a newspaper, published where the trust’s grantor lived at the time of their death or where the trust assets were situated, once a week for four consecutive weeks. The publication should substantially read as follows:
To all persons interested in the estate of _________. decedent. The undersigned ________ is acting as Trustee under a trust the terms of which provide that the debts of the decedent may be paid by the Trustee(s) upon receipt of proper proof thereof. The address of the Trustee is _________. All creditors of the decedent are noticed to present their claims to the undersigned within six (6) months from the date of the first publication of this notice or be forever barred.
__________________
Trustee
As a result of a trust’s notice publication, debts not presented to the trustee six months from the first publication date are barred against the trustee and the trust.
Comparatively, Illinois does not provide for a notice publication to extinguish creditors against a trust, but it does provide a 9-month statute of limitations for filing claims under section 505(a)(6) of the Illinois Trust Code (760 ILCS 3/505(a)(6)). Further, Illinois has long recognized the doctrines of laches and avoidable consequences as they pertain to a claimant’s attempt to satisfy claims from a trust’s assets, thereby putting the onus of responsibility on the creditor to notice up their debts on a timely basis.
Where Missouri puts the responsibility on the successor trustee to notify potential creditors of a trust grantor’s death via notice publication, Illinois puts no such responsibility on the successor trustee, instead requiring the decedent’s creditors to come forward before the 9-month statute of limitations has run.
Practically speaking, for a Missouri trust, successor trustees shouldn’t proceed with making distributions to beneficiaries until 6 months have passed from the date of first publication notifying creditors of the trust grantor’s death. For an Illinois trust, successor trustees should wait 9 months following the trust grantor’s death before making distributions to beneficiaries. By following these guidelines, the successor trustee can ensure that creditors have had a fair chance to present claims and facilitate a smooth distribution of the trust’s assets to the beneficiaries.
Managing a trust involves handling any debts owed, and the laws governing this process can vary significantly between states. For help navigating these complexities in Missouri or Illinois, especially concerning creditor claims, contact Stock Legal attorney Shannon McDonnell for a free consultation.