Legal Question in Wills and Trusts in California

Re: Assets and debt of decease mother

Don't yield to the pressure from the creditors. They're trained to look for payment from any source they can possibly get it. Just yesterday I had a bill collector tell me that if I were really looking out for my client's best interests, I would pay the debt myself (out of my own pocket) to clear the client's credit report!

You are not liable for your mother's debts unless you inherit from her - and then you're only liable to the extent of her assets. So the creditors could require you to pay over any money in her bank accounts that you receive. Retirement plan assets are generally exempt from creditors' claims (but may not be, depending on the kind of retirement account it is).

California law does require that a will be "lodged" in the probate court of the county in which your mother resided, even if there is no probate. If no probate is started, though, you are not the executor. Your mother's will merely nominated you to be the executor; you have no legal authority or duty unless/until the Court appoints you.

I'd tell the creditor that's threatening you that California law requires all creditors to be treated as if there were a "bankruptcy" when there isn't enough money to pay everyone.

For example. if you or your sister paid any funeral expenses, those are considered "priority" claims and get paid in full before general creditors get a penny. Likewise, if your mother owed any taxes, those are paid before general creditors. If there's any money left after paying for the funeral and taxes, there are a couple of other levels of priority (including executor fees and attorney fees). Next comes secured creditors (like mortgages, car loans, etc.). Unsecured creditors (like credit cards, doctors' bills, nursing home bills, etc.) come next.

If there's not enough to pay a class of creditors completely, you need to figure out how much money is available in the estate, then add up the total owed to that class of creditors. You then divide the total owed by the amount available to come up with a percentage ... each of the creditors gets paid a percentage. So, for example, if there's $2000 available to that particular class of creditors and the total owed to that class of creditors is $3000, you would calculate 2000/3000 = 66-2/3% and you would pay each creditor 66-2/3%.

This information is not intended to substitute for professional legal advice and does not create an attorney-client relationship. You should accept legal advice only from a licensed legal professional with whom you have an attorney-client relationship.