Legal Question in Wills and Trusts in California
Probate and credit card debt
My father lives in CA and has a terminal illness. He operated a small board and care home which is closing this month and is not saleable, he rents the business property. He has about $25,000 in debts, most of it credit card debt, back rent, and unpaid utility bills related to the business. He does not own a home or car, I estimate his personal assets are worth about $2000. His business checking account will have about $200 left when the business closes, he has no personal checking or savings accounts. I don't think he will live long enough to file bankruptcy.
He is married to my stepmother but they have always kept their finances separate and lived in separate homes throughout their marriage due to career locations. She owns the house she lives in and he is not on the title. They have no community property that I'm aware of. He has a will naming my stepmother and his 3 children as beneficiaries.
When he passes on, what happens to all his debts since they exceed his assets? Should his estate go through formal probate, even though it's worth less than $100,000, to hopefully discharge the debt? Will my stepmother be liable for any of the debts? Thank you
1 Answer from Attorneys
Re: Probate and credit card debt
You have an interesting problem. There are situations where a spouse can be liable for the other spouses debt, especially if the debt in any way benefited the community (California community property law).
I would not think that probate would be necessary. Probably a letter to the creditors with a copy of a death certificate might suffice, since there are no individual assets.
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