Legal Question in Bankruptcy in California

First of all, a living will is a power of attorney for health care, so I think you are using the wrong terminology. What I think you meant to say is that your father owns the home that you live in and in his last will and testament, you are the beneficiary of the home.

Is your father in poor health? Is there a mortgage on the property? Your father should create a trust and transfer the house into the trust. This will avoid probate. You can also include language that prevents you from inheriting the home if it becomes subject to creditors.

Since you don't own the home right now, you should use system 2. But, I also suggest that you hire a local bankruptcy attorney for assistance to make sure you are properly advised on what to do.