Legal Question in Wills and Trusts in California

His 'estate' is liable for his debts. That means to the extent there are assets, debts will be paid. If there is a $7K gain on the sale after the house is sold, then that money is used to pay all the debts and if there is not enough, then those debts are unpaid.

One must be careful of distributing any assets that were his prior to payment of creditors because the reality is a creditor can go after a beneficiary to the extent they receive anything that could have been sold to pay the creditor. So, if you disburse a car worth $10K and don't sell it to pay debts, in theory, a creditor can petition to have that asset sold to pay them. His family is not liable for his debts beyond any assets they may receive. As his child, you are not required to personally assume his debt.

Hope that helps.

Your post is confusing. In your second sentence, you state he owned the house. In your fifth sentence, you state that there is no probate, because he didn't own the house. You then state that the mortgage (which is a legal device and not a legal entity) is taking back the house.