Pennsylvania § 7755 - Claims and distribution after settlor's death.

§ 7755. Claims and distribution after settlor's death.

(a) Creditors' rights.--Creditors of the settlor of a revocable trust shall have the same rights against the trust assets determined immediately before the settlor's death as they have against the settlor's estate, but the assets of the settlor's estate shall be applied first toward satisfaction of the creditors' claims. This subsection shall not expose to creditors' claims trust assets for which other provisions of substantive law provide exemption from the claims of the settlor's creditors.

(b) Enforcement of claim against revocable trust.--A creditor may make a claim against a revocable trust by notifying the settlor's personal representative as provided in section 3384 (relating to notice of claim) or, if no personal representative has been appointed, by notifying the trustee according to the methods set forth in section 3384. A personal representative who receives notice shall within 20 days notify the trustee in writing and upon doing so shall have no liability under this section to the creditor.

(c) Trustee's duty to advertise.--

(1) A trustee of a revocable trust:

(i) May advertise at any time after the settlor's death.

(ii) Shall advertise if the first advertisement of the grant of letters by the settlor's personal representative does not occur within 90 days after the settlor's death.

(2) Advertisements by the trustee under this subsection shall be in the manner set forth in section 3162 (relating to advertisement of grant of letters), shall be done in the jurisdiction of the deceased settlor's domicile and shall include:

(i) The fact of the trust's existence.

(ii) The trustee's name and address.

(3) The personal representative of the settlor of a revocable trust shall send to the trustee copies of the proof of publication of the advertisement of the grant of letters.

(d) Liability of personal representative.--A personal representative who has received the notice required by section 7780.3(c) (relating to duty to inform and report) and does not notify the trustee of a revocable trust of a creditor's claim known to the personal representative within one year after the first complete advertisement of the grant of letters to the personal representative shall be liable to the creditor to the extent the creditor's interest is prejudiced thereby. A personal representative shall have no liability under this section to a creditor whose claim is not known to the personal representative within one year after the first complete advertisement of the grant of letters to the personal representative. The provisions of this section shall not affect the liability of the settlor's personal representative under other provisions of law.

(e) Liability to any creditor.--At the trustee's own risk and without the filing, audit or confirmation of the trustee's account, a trustee of a revocable trust who has either given the settlor's personal representative the notice required by section 7780.3(c) or given the notice required by subsection (c) may distribute real or personal property of the revocable trust. That distribution shall be without liability to any creditor of the settlor unless the claim of that creditor is known to the trustee within 13 months after the first complete advertisement of the grant of letters to the personal representative or, if no personal representative has been appointed, within one year after the first complete advertisement under subsection (c).

(f) Rights of creditors against distributed property.--

(1) No creditor shall have any claim against personal property distributed by the trustee of a revocable trust at the trustee's own risk under subsection (e) unless the claim of the creditor is known to the trustee within 13 months after the first complete advertisement of the grant of letters to the personal representative or, if no personal representative has been appointed, within one year after the first complete advertisement of the trust under subsection (c).

(2) No creditor shall have any claim against real property distributed by the trustee of a revocable trust at the trustee's own risk under subsection (e) unless the creditor, within one year after the settlor's death, files a written notice of claim with the clerk. The claim against real property shall expire at the end of five years after the settlor's death unless within that time the trustee files an account or the creditor files a petition to compel an accounting.

(g) Judicial principles.--In any proceeding by a creditor against a trustee or beneficiary of a revocable trust, the court shall apply principles analogous to:

(1) section 3387 (relating to claims not due; certain to become due);

(2) section 3388 (relating to claims not certain to become due);

(3) section 3392 (relating to classification and order of payment); and

(4) section 3393 (relating to notice to Commonwealth and political subdivisions).

(Oct. 27, 2010, P.L.837, No.85, eff. 60 days)

2010 Amendment. Act 85 amended subsec. (c).