Legal Question in Wills and Trusts in California
Who is responsible for estate debts
There are four beneficiaries. One inherits a condo worth $500,000. The other three share a stock/bond fund worth $400,000. There are $30,000 in debts (Hospital, funeral, homeowners fees etc). How are these debts allocated between the four beneficiaries.
2 Answers from Attorneys
Re: Who is responsible for estate debts
Is the distribution made through a will or a trust? If there is only a will, then the estate must go through probate, and the probate court will give you guidance according to the terms of the will if specified in the will or according to State Law if not. If the transfer was made via a trust, again the trust language should provide for how the trustee is to administer the estate after the death. If you do not see the answer in the instrument, feel free to give me a call and I review over the phone with you to help you find the answer.
Re: Who is responsible for estate debts
The will or trust should have provisions regarding this issue. If there is no will or trust, then the probate code applies. Generally, debts are payable from the probate estate, which usually excludes the following: life insurance proceeds, pension plan proceeds, pay-on-death accounts, joint tenancy property, trusts individual retirement accounts or other contract proceeds.
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