The only real asset that he left was a nonoperational car that may be worth $2-$5000. He had a car that still had at least as much left on the loan as the value and the lender has agreed to a voluntary surrender. Credit card debt is $11000 and there are likely back taxes due. There is a life insurance policy, but beneficiaries are named and he is a partner in family property that is in a trust. I believe that both of those are out of probate. Must we probate in order to process the car and pay creditors? If not, do we just sell the car and then pay the IRS, funeral costs, etc or is there a different process that must be taken. Can I get reimbursed for cost associated with the clean out of his apartment? What is the order in which creditors get paid? Thank you!
My father resided in CA his whole life and died there as well
I highly recommend your consulting with an estate planning/probate attorney in your area regarding your brother's estate. There may be the potential for a shortened probate administration, based upon the minimal amount of assets in his estate. However, it is not clear whether the car is his only probate asset. Depending upon the terms of the trust you mention, his portion of the family property may be includable in his probate estate. Consult with an attorney to verify exactly what is includable in your brother's probate estate and the statutory hierarchy of creditor claims so you do not run afoul of this complicated territory.
Stephen Samuel MessuttaReal Estate AttorneyWilmette, IL ·
The answer is that you should take all of this to a probate attorney. The real issues here are (a) how might the estate creditors try to get satisfaction on their debts and (b) how can you get clean title to anything of value that could survive creditor attacks.
Probate requires notification of KNOWN creditors and publishing as to unknown. This gets everyone into the picture to sort things out. Probate will allow costs of administration to be paid first (attorney fees, court costs) and then the creditors. Once everyone has proper notice, there are ample opportunities to negotiate things down and/or out if it becomes clear that the estate doesn't have the assets to cover them. HOWEVER, you should seek an attorney's help because if the trust was established less than 5 years prior to his death, there may be some creditors (the government for example if he received any medicaid or other entitlements) who can seek to skirt the trust and get to assets he put into it.
There is a procedure (in both Illinois and California) called a small estate affidavit that you can use to pass title to the car. The order of debts in California is:
administration (including funeral, clearing out apartment if you have receipts but NOT for your time -- too risky and subject to complaints)
taxes (IRS)
then credit card companies, etc.
(there are other categories, just not relevant here).
So, yes, collect the car title with the small estate affidavit (see DMV site which should have the form), sell it, and do the reimbursement in the above order. Likely the funeral expenses willl absorb everything.
