Palmer Rodak & Associates
Palmer Rodak & Associates
Certified Family Law Specialists State Bar of California Board of Legal SpecializationServing your Community for 19 Years
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Understanding debts and death

When most people in California think about making a will, they think about leaving something to their heirs. However, it should be remembered that asset distribution is not the only activity that takes place regarding a person's estate when they die. Any debts that the deceased person had ideally are to be paid as well. This is an important part of the probate process and it can reduce the amount of money left for heirs.

As explained by the Federal Trade Commission, just because a person has died does not mean that their debt has also died. Debts continue to live on well after a person's death and should be paid first before anything is distributed to people named in a will. If the amount of debt a person had exceeds the value of the estate, some debts may well go unpaid. There are a few exceptions to this, however.

A person who was named the executor of a will and was deemed to have financially mishandled parts of the probate process may find themselves liable for some debt. People who held joint debt with the deceased person may also still be responsible for the remaining debt. And, because California is a community property state, a spouse could be on the hook for some debt even if it was in their deceased spouse's name alone.

According to CNBC, if a debt has collateral associated with it as with an auto loan, those assets may be seized for repayment of the debt. Also, some assets may be outside the scope of probate such as the value of a life insurance inheritance.

 

 

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Palmer Rodak & Associates
Certified Family Law Specialists State Bar of California Board of Legal Specialization

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Del Mar, CA 92014

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