SECTION 3-321. UNIVERSAL SUCCESSION; LIABILITY OF UNIVERSAL SUCCESSORS FOR CLAIMS, EXPENSES, INTESTATE SHARES AND DEVISES Uniform Probate Code
The liability of universal successors is subject to any defenses that would have been available to the decedent. Other than liability arising from fraud, conversion, or other wrongful conduct of a universal successor, the personal liability of each universal successor to any creditor, claimant, other heir, devisee, or person entitled to decedent’s property may not exceed the proportion of the claim that the universal successor’s share bears to the share of all heirs and residuary
This is the primary provision for the successor’s liability to creditors and others. The theory is that the universal successors as a group are liable in full to the creditors but that none have a greater liability than in proportion to the share of the estate received. Under the UPC, since informal administration is available with limited liability for the personal representative, the analogy to the Louisiana system would be to accept full responsibility for debts and claims if succession without administration is desired but to choose informal administration if protection of the inventory is desired.
This definition of liability assumes, first, that the devisees and heirs are subject to the usual priorities for creditors and devisees and abatement for them in Sections 3-316 and 3-317. Second, it is assumed that if a creditor or a subsequently appointed personal representative were to proceed against the successors, having jurisdiction by submission, Section 3-318, the liability would be on a theory of contribution by the successors with the burden on each universal successor to prove his or her own share of the estate and liability against that share.
Third, it is also assumed that, a creditor who is unprotected or unsecured under Section 3- 322, can object to universal succession under Section 3-314(c) and if the creditor does not object, payments by the successors, like those by the decedent when alive, will be recognized as good without any theory of preferring creditors. Thus, until a creditor takes action to require administration; that creditor should be bound by the successors’ non-fraudulent prior payment to other creditors. If a creditor suspects insolvency, he can put the estate into administration and after the appointment of a personal representative would have the usual priority as to remaining assets. This would be subject to the theory of fraud, i.e., a knowing and conscious design on the part of the successors to ignore the priority of the decedent’s creditors to the harm of a creditor. This would constitute fraud that would defeat the limits on successor’s liability otherwise available under the statute.