Most people know that debt doesn’t actually transfer upon the death of the debtor. If you have debt, when you die, they can’t make your next of kin pay your debt out of their own pocket, for example. Still, it doesn’t exactly go away either. If you have an estate, creditors will go after your estate to get their money back. Unless you created specific protections to avoid paying your debt from certain parts of your estate, this is just part of the probate process, and your creditors get first dibs. So, the next of kin doesn’t pay out of their own pocket for the debtors’ debt, but they may not inherit as much. The creditors get paid before funds are allocated to heirs.
This doesn’t mean some creditors won’t try to act like the next of kin has a responsibility to pay off their loved one’s debt. Sometimes, they will try. We once heard of a woman getting a call from a motorcycle dealership saying she owed money for her brother’s bike… when he was still alive! So, creditors will try to get their money sometimes in unseemly ways. Of course, had the woman co-signed on the loan, she would have been responsible. But in this instance, she didn’t.
That brings up another important point. When co-signing on a loan for someone, be aware that if they die, that debt is generally all yours! So, if you co-sign on someone’s home and they pass away, you suddenly have the responsibility of resolving that debt.
Most of the time, creditors extract the funds they need from the debtor’s estate. Once all the debt is paid from the estate and all the court and professional fees are paid, the remainder can get passed along to heirs.
Do You Need A California Realtor Specializing In Probate?
We are experts in the probate sale under the probate code and trust law. So, we know the California Probate Code. We won’t let you get lost in it. If you need a realtor in California specializing in probate, please contact us today! We are upfront and honest about the costs of probate. Everyone wants to know about probate fees, but no one wants to talk about them. We will though. Sentinel Realty Partners wants our clients to be fully prepared and fully informed about buying or selling California probate real estate.
We have a list of the absolute best probate lawyers in California available for our customers. Plus, we also have relationships with the most vetted contractors, plumbers and electricians in California. See? We will guide you through every step of the process of selling (or even purchasing) a home involved in probate.
If you are buying a home in California, please have a look at our probate property search. If you need a Los Angeles, Orange County, Riverside, or San Bernardino professional to help you through the probate real estate maze, call us! These waters a murky, and you’ll want a knowledgeable, dependable, responsive team behind you. Check out Sentinel Realty Partners’ client reviews.