People are concerned about their personal exposure to the debts of their loved ones who have died. The good news is that they are not liable for that debt. In California, the creditors of a decedent are paid out of the decedent’s estate before any distributions are made to heirs. This may include selling the decedent’s assets in order to pay outstanding debt. If you took a decedent’s assets before debts were paid, however, you may be liable for paying creditor claims. It is important to understand that in a community property state, including California, there is a chance the decedent’s spouse may be responsible for paying some of the debts acquired during the marriage. In addition, heirs and beneficiaries may be liable for any co-debts and debts they personally guaranteed. Pursuant to the California Probate Code and the Probate Code, debts of the decedent are paid according to their priority which is:
1. Expenses of administration
2. Obligations secured by a mortgage, deed of trust, or other lien
3. Funeral expenses
4. Expenses of last illness
5. Family allowance
6. Wage claims
7. General debts, including judgments not secured by a lien and all other debts not included in a prior class
Once the bills and debts have been paid, the estate can make distributions to the heirs and beneficiaries.
If you need to administer an estate, let us help guide you through the process. We can help you fulfill your legal obligations, including paying debts, and avoid any legal issues.
To set your appointment right away, please call us at: (714) 963-7543. You will not get the typical law firm feel from our office. We are different. Our systems are designed to save you time, to save you money, and to put you in control. At The Legacy Lawyers we are dedicated to your peace of mind.