Legal Question in Wills and Trusts in California
Credit card debts with a living trust present
My mother-in-law recently passed away. She had established a living trust in July 2006. Assets such as her house were placed in the trust. The house had to be sold in order to pay her living expenses. She had credit cards with balances at the time the trust was established, but no charges were made on any of the accounts. Minimum payments were made.
Do the balances have to be paid from the remaining assets from the sale of the house?
3 Answers from Attorneys
Re: Credit card debts with a living trust present
Thank you for your question. I think you might find California Probate code section 19001 helpful, which states:
"19001. (a) Upon the death of a settlor, the property of the
deceased settlor that was subject to the power of revocation at the
time of the settlor's death is subject to the claims of creditors of
the deceased settlor's estate and to the expenses of administration
of the estate to the extent that the deceased settlor's estate is
inadequate to satisfy those claims and expenses.
(b) The deceased settlor, by appropriate direction in the trust
instrument, may direct the priority of sources of payment of debts
among subtrusts or other gifts established by the trust at the
deceased settlor's death. Notwithstanding this subdivision, no
direction by the settlor shall alter the priority of payment, from
whatever source, of the matters set forth in Section 11420 which
shall be applied to the trust as it applies to a probate estate.
19002. (a) Except as expressly provided, this part shall not be
construed to affect the right of any creditor to recover from any
revocable trust established by the deceased settlor.
(b) Nothing in this part shall be construed as a construction or
alteration of any claims procedure set forth under Part 4 (commencing
with Section 9000) of Division 7. "
All the best.
Re: Credit card debts with a living trust present
Yes. All of her personal debts have to be paid from her assets. Assets in a living trust (revocable trust) belong to the Trustor (your mother-in-law) during her lifetime. The trust document states one way or another that the successor trustee must first pay her just debts and then should distribute the remaining assets according to the testamentary plan contained in the trust document.
Re: Credit card debts with a living trust present
Yes. All of her personal debts have to be paid from her assets. Assets in a living trust (revocable trust) belong to the Trustor (your mother-in-law) during her lifetime. The trust document states one way or another that the successor trustee must first pay her just debts and then should distribute the remaining assets according to the testamentary plan contained in the trust document.
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