When someone dies owing money, the debt does not necessarily disappear.

Credit-card companies, contractors, lenders, medical providers, judgment creditors, and even individuals may have claims against the deceased person's estate. Texas probate law establishes procedures through which creditors may present those claims and personal representatives may evaluate them.

But what happens when the executor or administrator says no?

Texas law contains an important rule governing rejected creditor claims. In some probate administrations, a creditor who does not act quickly after rejection can lose the claim entirely.

There is also a major exception: the same 90-day rule generally does not apply to an independent administration.

Understanding the distinction can be critical for creditors, executors, administrators, and beneficiaries.

Texas Estates Code § 355.064 Creates a 90-Day Deadline for Certain Rejected Claims

Texas Estates Code § 355.064 addresses suits on rejected claims.

The statute provides, in part:

“A claim or part of a claim that has been rejected by the personal representative is barred unless…”

The creditor generally must commence suit not later than the 90th day after the date of rejection in the court of original probate jurisdiction where the estate is pending.

That is a serious deadline.

Consider a simple example. A contractor claims that a deceased homeowner owed $20,000 for work performed before death. The contractor properly presents the claim during administration, but the personal representative rejects it.

The rejection does not necessarily mean the personal representative has the final word about whether the money is actually owed.

Instead, the dispute may have to become a lawsuit.

And in an administration governed by § 355.064, waiting more than 90 days after rejection can result in the claim being barred.

Rejection Does Not Necessarily Mean the Debt Was Invalid

It is important to distinguish between rejection of a claim and a judicial determination that the creditor is wrong.

A personal representative may dispute whether a debt exists, whether the amount claimed is correct, whether the claim is adequately documented, or whether the estate has a legal defense.

The creditor and the estate may simply disagree.

Section 355.064 provides a mechanism for moving that disagreement from the claims process into court.

Thus, rejection can effectively force the creditor to decide whether the amount at issue justifies litigation.

For a small claim, filing suit may make little economic sense. For a substantial claim, however, missing the applicable deadline could be extremely costly.

The 90-Day Rule Has a Major Exception: Independent Administration

Here is where Texas probate procedure becomes considerably more interesting.

A large number of Texas estates are handled through independent administration, which allows an independent executor or administrator to administer an estate with substantially less ongoing court supervision.

Texas Estates Code § 403.058 expressly addresses the relationship between independent administration and the creditor-claim procedures applicable elsewhere in the Estates Code.

The statute provides:

“Sections 355.064 and 355.066 do not apply to independent administrations…”

That language makes an enormous difference.

Section 403.058 further explains that a creditor's claim in an independent administration is not barred solely because the creditor failed to file suit within 90 days after the independent executor rejected the claim.

In other words, the statement:

“An executor rejected my probate claim, so I always have exactly 90 days to sue.”

is not an accurate statement of Texas law.

The type of administration matters.

Dependent and Independent Administrations Operate Differently

Texas probate law recognizes significantly different systems for administering estates.

In a dependent administration, the administrator generally operates under much greater court supervision. Numerous actions may require court approval, and the statutory creditor-claim procedures play a larger role.

An independent administration is designed to permit estate administration with less judicial involvement.

That procedural difference extends to rejected claims.

Texas Estates Code § 403.058 states more broadly that, except as otherwise provided, the procedural provisions governing creditor claims in supervised administrations do not apply to independent administrations.

Consequently, before calculating a deadline from the rejection of a probate claim, one of the first questions should be:

Is this estate being administered independently or dependently?

The answer can materially change the creditor's legal position.

Independent Administration Does Not Mean a Creditor Can Wait Forever

The exception to § 355.064 should not be misunderstood.

Section 403.058 does not say that creditors in independent administrations have unlimited time to enforce their claims.

Other deadlines may still apply.

For example, ordinary statutes of limitations can continue to affect the underlying debt. Texas Estates Code § 403.057 also makes clear that merely presenting a statement, claim, or notice to an independent executor does not necessarily stop the applicable limitations period from running.

Accordingly, a creditor should not respond to rejection by assuming that nothing needs to be done.

The correct analysis may require consideration of the underlying cause of action, its limitations period, the probate notices that have been given, the nature of the claim, and the particular form of administration.

An Independent Executor Can Still Be Sued

Independent administration reduces court supervision. It does not make an estate immune from legitimate creditor claims.

Texas Estates Code § 403.059 permits a person having a debt or claim against an estate to enforce payment by suit against the independent executor when the statutory requirements are satisfied.

Thus, an independent executor's refusal to pay a claim does not necessarily end the matter.

It may simply mean that the creditor must decide whether to pursue judicial enforcement.

Executors Should Not Automatically Pay Every Claim Either

The issue also matters from the estate's perspective.

An executor or administrator has responsibilities to the estate and its beneficiaries. Paying every invoice that arrives merely because someone demands money may improperly reduce the property ultimately available for distribution.

A personal representative may need to investigate questions such as whether the debt actually belonged to the decedent, whether it has already been paid, whether the amount is accurate, whether limitations has expired, whether sufficient documentation exists, and whether the creditor has complied with applicable probate procedures.

A disputed claim therefore creates competing risks.

Rejecting a legitimate claim may lead to litigation. Paying an invalid claim may improperly diminish the estate.

Written Rejection Can Have Serious Consequences

Because statutory deadlines may run from the date of rejection, documentation matters.

Creditors should preserve correspondence from the personal representative and determine exactly when and how the claim was rejected. Executors and administrators likewise should maintain careful records concerning claims received, actions taken on those claims, and notices provided to creditors.

A seemingly routine letter from an administrator can have substantial procedural consequences.

That is especially true in a dependent administration where § 355.064's 90-day rule applies.

The Type of Probate Administration Can Change the Answer

Texas probate law contains many rules that appear simple until different forms of administration are compared.

Rejected creditor claims are a good example.

Under Texas Estates Code § 355.064, rejection of a claim in an administration governed by that provision can trigger a 90-day period in which the creditor must commence suit or risk having the claim barred.

But Texas Estates Code § 403.058 expressly provides that § 355.064 does not apply to independent administrations. A creditor in an independent administration therefore is not barred solely because the creditor failed to sue within 90 days after rejection.

That does not mean the creditor can ignore the matter. Other limitations periods and probate procedures may still control.

For anyone dealing with a rejected estate claim, the critical questions are not simply “Was my claim rejected?” and “When?”

There is another question that may be just as important:

What kind of probate administration is this?

At David C. Barsalou, Attorney at Law, PLLC, we help clients navigate business, family, tax, estate planning, and real estate matters ranging from document drafting to litigation with clarity and confidence. If you’d like guidance on your situation, schedule a consultation today. Call us at (713) 397-4678, email barsalou.law@gmail.com, or reach us through our Contact Page. We’re here to help you take the next step.