Which Debts Take Priority In A California Probate Process
One of the major duties of a personal representative of a California estate is paying debts. Therefore, if you are the personal representative of a decedent’s California estate, you need to understand everything there is to know about paying debts during probate and handling creditors in probate. For example, do you know that personal representatives are required to notify creditors concerning the decedent’s death? According to California Probate Law, Code Section 9050, a personal representative of a California estate is legally obligated to give notice of administration of the estate to creditors of the decedent. The law requires you to provide this notice to all known or reasonably ascertainable creditors. Nevertheless, you should note that you will not be held liable if you fail to give notice to an estate creditor unless it is established that, among other things, your failure to give notice was in bad faith.
Do you also know that some debts take priority over others in California probate? As the personal representative of a decedent’s estate, there are some debts you will be required to prioritize over others. Generally, you are required to pay estate debts in a specific order.
So, what is the order in which a personal representative of a California estate is required to pay off estate debts? Find out below.
Which Debts Take Priority in a California Probate?
If you are the personal representative of a decedent’s estate, you should know that under California probate law, you are required to follow a specific order when paying off estate debts. You cannot clear debts in any order you deem fit. According to California Probate Law, Code Section 11420(a), the following is the order in which a personal representative of a California estate is required to pay off estate debts:
- Expenses of administration
- Mortgage obligations
- Funeral expenses
- Expenses related to the illness that led to the decedent’s illness
- Family allowance
- Wage claims
- General debts, including debts not secured by a lien, also known as unsecured debts
- All other debts
It is crucial to note that debts owed to the state of California or the United States of America that have preference under the laws of California or America should be given the priority that such laws require.
According to California Probate Code Section 11420(b), a debt of another class cannot be paid until all the debts of a prior class have been paid. For example, medical expenses associated with a decedent’s last illness cannot be settled until all funeral expenses have been settled. Suppose there is not enough estate property to pay all funeral expenses. Each debt under the class of funeral expenses shall be paid a proportionate share in such a case.
What Is Family Allowance?
A family allowance is a court-authorized payment made to particular loved ones of a decedent that depended on the decedent for support before their death. This payment is quite crucial to the surviving loved ones. Examples of individuals who may be eligible for a family allowance include a surviving spouse and surviving minor children.
Contact a California Probate Lawyer
If you need help handling debts and creditors in a California probate, feel free to contact the dedicated California probate attorney, Robert L. Cohen – The Probate Guy – to schedule a telephonic consultation.