The survivors or any interested property (such as a creditor) may open an estate to deal with various administrative issues when someone passes away. Such actions may occur whether the deceased had a will or died without one. Either way, matters related to settling obligations and distributing assets that are not titled in a trust occur in a California probate court. The process involves, federal law, state law, local rules of court, and local ordinances (like county property taxes).
Understanding how probate works
Some might not realize the courts become involved when the time comes to execute a deceased’s will. The court plays a supervisory role to ensure everyone follows the deceased’s wishes, per the will, and the law. The court will ascertain that the chosen executor or a reliable replacement handles personal representative duties and distributes assets to the designated beneficiaries within an appropriate time frame. Substantially the same process occurs when someone dies without a will, except that in that case the beneficiaries are determined by laws of intestacy, which are the laws directing who has a right to inherit when someone dies without a will.
utor’s duty to make sure the creditors’ rights are upheld. Creditors must be informed of the administration of the estate and they must be given the opportunity to file a creditor’s claim. The executor (if there is a will) or executor (if there is no will) must then evaluate each creditor’s claim and decide whether it should be paid in full, negotiated downward, or denied in its entirety. In short, credit card balances, medical bills and other financial obligations generally require payment before any beneficiaries receive their assets.
An executor/administrator must notify all reasonably ascertainable creditors of the administration of the estate. This does not mean an executor must seek non-obvious creditors by acting as one’s own private investigator. But it does mean that a creditor must inform the credit card issuer who is sending notices to the deceased’s mail.
Tax obligations and notifying government agencies
Tax obligations do not end when someone dies. Tax authorities are also entitled to notice of the administration of an estate. The deceased’s representative must file required state and federal tax returns and pay any balances due. Wealthy estates may need to address estate taxes, as well.
Other government agencies, like the Department of Health Care Services and the county Assessor (where the deceased owned real property), must also receive timely notice of a probate so that they may have the opportunity to make a claim against the estate.
These obligations can be complicated. For example, depending on when the deceased died, there may be certain forms needed to be filed with the County Assessor in order to avoid reassessment of property taxes. An executor who fails to claim such an exemption could be liable to the beneficiaries for otherwise unnecessary taxes levied against the estate. This is why it is important to have an experienced probate lawyer on your side if you are the executor or administrator of an estate.