Creditors Have Nine Months Max to Make Claims Against the Estate, Except Government, Medicaid, & Taxes Due

Creditors Have Nine Months Max to Make Claims Against the Estate, Except Government, Medicaid, & Taxes Due 3B:22-4.      Creditors of the decedent shall present their claims to the personal representative of the decedent's estate in writing and under oath, specifying the amount claimed and the particulars of the claim, within nine months from the date of the decedent's death.         If a claim is not so presented to the personal representative within nine months from the date of the decedent's death, the personal representative shall not be liable to the creditor with respect to any assets which the personal representative may have delivered or paid in satisfaction of any lawful claims, devises or distributive shares, before the presentation of the claim. 3B:31-36. Spendthrift Provision. a. A spendthrift provision is valid only if it restrains both voluntary and involuntary transfer of a beneficiary's interest. b. A term of the trust providing that the interest of a beneficiary is held subject to a "spendthrift trust," or words of similar import, is sufficient to restrain both voluntary and involuntary transfer of the beneficiary's interest. c. A beneficiary may not transfer an interest in a trust in violation of a valid spendthrift provision and, except as otherwise provided in this article, a creditor or assignee of the beneficiary may not reach the interest or a distribution by the trustee before its receipt by the beneficiary. d. A spendthrift provision is valid even though a beneficiary is named as the sole trustee or as a co-trustee of the trust. e. A valid spendthrift provision does not prevent the appointment of interests through the exercise of a power of appointment. 3B:31-38. Discretionary Trusts; Effect of Standard. a. Whether or not a trust contains a spendthrift provision, a creditor of a beneficiary may not compel a distribution that is subject to the trustee’s discretion, even if: (1) The discretion is expressed in the form of a standard of distribution; or (2) The trustee has abused the discretion. b. This section does not limit the right of a beneficiary to maintain a judicial proceeding  against a trustee for an abuse of discretion or failure to comply with a standard for distribution. c. With respect to the powers set forth in section 1 of P.L.1996, c.41 (C.3B:11-4.1), the provisions of this section shall apply even though the beneficiary is the sole trustee or a co- trustee of the trust. 3B:31-39. Creditor's Claim Against Settlor. a. Whether or not the terms of a trust contain a spendthrift provision, the following rules apply: (1) During the lifetime of the settlor, the property of a revocable trust is subject to claims of the settlor's creditors. (2) With respect to an irrevocable trust, a creditor or assignee of the settlor may reach the maximum amount that can be distributed to or for the settlor's benefit. If a trust has more than one settlor, the amount the creditor or assignee of a particular settlor may reach may not exceed the settlor's interest in the portion of the trust attributable to that settlor's contribution. (3) After the death of a settlor, and subject to the settlor's right to direct the source from which liabilities will be paid, the property of a trust that was revocable at the settlor's death is subject to claims of the settlor's creditors, costs of administration of the settlor's estate, the expenses of the settlor's funeral and disposal of remains, and to a surviving spouse or partner in a civil union and children to the extent the settlor's probate estate is inadequate to satisfy those claims, costs, expenses. b. For purposes of this section: (1) during the period the power may be exercised, the holder of a power of withdrawal is treated in the same manner as the settlor of a revocable trust to the extent of the property subject to the power; and (2) upon the lapse, release, or waiver of the power, the holder is treated as the settlor of the trust only to the extent the value of the property affected by the lapse, release, or waiver exceeds the greater of the amount specified in section 2041(b)(2) or 2514(e) of the federal Internal Revenue Code of 1986 (26 U.S.C. s.2041(b)(2) or 26 U.S.C. s.2514(e)), or section 2503(b) of the federal Internal Revenue Code of 1986 (26 U.S.C. s.2503(b)), in each case as in effect on the effective date of this act, or as later amended.