When you are the personal representative of a deceased family member or friend, your main responsibility is settling their estate. However, what happens if the decedent dies with outstanding student loans or credit card debt? Generally speaking, YOU should not be responsible for paying these debts. Instead, the money should come out of the estate. That said, an estate attracting excessive creditors’ claims could cost you. More specifically, an indebted estate facing conflicts with creditors could mean a substantial increase in California probate costs and fees.
When Are Executors Responsible for Paying an Estate’s Debt?
California is a community property state. Therefore, the court considers two individuals who are married or in a domestic partnership one “community”. While family members are not typically responsible for an estate’s debts, spouses and registered domestic partners will most likely incur their spouse’s debt upon their death.
That said, in a probate proceeding with an executor who was not married to the decedent, the executor will usually not incur any debt. Instead, the estate will pay all debts until it runs out of money. Otherwise, any remaining assets in the estate will go to beneficiaries. Keep in mind that if an executor chooses to pay beneficiaries BEFORE settling debt, that individual may be held financially responsible. Likewise, if an executor fails to notify creditors of the decedent’s death, they may also incur legal fees.
Added Costs and Fees for Settling Creditors’ Claims in California Probate
If executors are usually not financially responsible for a decedent’s debt, how would said debt affect them at all? Unfortunately, there are instances in which creditors may file false claims against an estate. Thus, as an executor or personal representative, it is your responsibility to recognize these false claims and deny them.
Sometimes, the added trouble ends here. However, at times, a false claim will go to court. This is where the cost of probate increases. For example, even after an executor has denied a claim, the creditor still has the right to bring the matter to court. After the creditor files a petition, both parties now have a period of time called “discovery” to collect evidence against one another.
As you can imagine, proving probate fraud is not an easy task for someone without a legal background. Therefore, a complicated case such as this one would most likely call for a probate attorney. Further, even if the personal representative has already hired a probate lawyer and paid statutory attorneys fees, they will most likely also incur extraordinary service fees for this case. Dealing with creditors’ claims is an extraordinary service, and your attorney may or may not charge you for their time.
Keep California Probate Costs and Fees Low
Unfortunately, an indebted estate dealing with potentially fraudulent collections agencies will most likely require an attorney’s assistance. However, for simple, uncontested estates, personal representatives can keep probate costs low by avoiding hiring a lawyer. In fact, working with a registered legal document assistant such as A People’s Choice can save the estate thousands of dollars in attorneys’ fees.
A People’s Choice has over 40 years’ experience helping clients with their California probate paperwork and filing their documents with the court. Plus, we offer low-cost, flat-fee packages specifically tailored to your needs. Contact us today or quick start your probate process to get started.
Was this article helpful? We would love to know your thoughts! If you found this article helpful, please check the LIKE button below. Your feedback helps us plan topics for future articles.