Wednesday, April 7, 2010

A lien created after the death of the debtor may not be a lien, at all.

If you have a claim involving an estate, and claims against that estate, take a look at Elder v. Smith, No. 34, September Term 2009, released January 13, 2010. Here, the ex-wife of the decedent reduced a marital award of over $30,000 to judgment AFTER hubby died. The Orphan's Court ordered her to release the lien. Both appellate courts upheld the Orphan's Court determination that the post-death creation of a judgment lien for a pre-death claim is not a permitted way to enhance the priority of a claim against the decedent's estate.

The Court of Appeals went further, saying that it was behond the jurisdiction of the Orphan's Court to invalidate a judgment of the Circuit Court. The Orphan's Court can only administer the estate of the dead fellow, and can only elect to disregard the relative lien priority created by the Circuit Court judgment.

It appears that this factual situation may require litigation in BOTH the Circuit Court and the Orphan's Court.