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Debt Issues in California Probate

Most people leave unpaid bills behind when they die. Heirs and beneficiaries generally focus on the value of assets and property, but the law still requires conclusion and fair handling of all the deceased’s affairs – which necessarily involves settling all financial affairs, business matters and unpaid debts.

Is Debt Inherited?

Debts during probate must be settled by the personal representative before any remaining funds and assets can be distributed to heirs and beneficiaries.

Generally, debts are not inherited by estate beneficiaries and heirs unless there is a direct contract between the creditor and a surviving party (for example, an auto loan cosigned with a family member). Absent such direct contractual relationship, debts usually stop with settlement of the estate in probate. The few exceptions include:

  • Cosigned debts: A contract cosigned with the deceased remains in effect with the surviving debtor, and the remaining balance is still due from the surviving debtor.
  • Community property exception: Community property states, including California, legally bind the debts of the deceased to a surviving spouse. The surviving spouse is then responsible for those debts even if not directly named in the debt contract. For debt created during the legal marriage, the surviving spouse can be held responsible for any remaining balance.

The Personal Representative Must Give Notice to Potential Creditors. Your Lawyer Can Help.

Being named a personal representative (executor or administrator) comes with many responsibilities. This includes notifying creditors of the death – You must consider all debts, then notify all affected parties. Only this proper notice and follow-through with their responses protects the estate from future claims by those creditors.

Commonly, the decedent’s debts include at least one from the following list:

  • Nursing home or hospital
  • Doctors or health care providers
  • Ambulance company
  • Landlord or rental agent
  • Mortgage holder for any real estate owned by the deceased
  • Utilities (electricity, gas, phone, water, etc.)
  • Credit cards
  • Business creditors (when a decedent’s business was not incorporated or for any business guaranties vouched for by the deceased as an individual)
  • Employees (cook, gardener, maid or private nurse)
  • Private loan holder
  • Securities broker holding an outstanding obligation
  • Mechanic
  • Anyone else who sends a bill directed to the deceased

As a Knowledgeable Attorney, I Can Help You Navigate the Probate Process

For an initial consultation, contact T.S. Wrobel Law Group to speak with Thomas Wrobel for your probate needs. Call (415) 928-4161now for an initial consultation, or reach us by email at We look forward to assisting you.