Disclaimer: This article is for educational purposes only and does not constitute legal advice. Always consult a licensed attorney in California for guidance specific to your situation.
Detailed Answer
When someone dies in California, their estate must address outstanding debts and creditor claims before distributing assets to heirs or beneficiaries. The person appointed to manage the estate (the executor or administrator) follows these general steps:
1. Identify the Executor or Administrator
The court issues Letters Testamentary or Letters of Administration to authorize the executor or administrator to act on behalf of the estate.
2. Inventory Assets and Known Creditors
The executor compiles a list of estate assets (bank accounts, real property, personal items) and investigates any known creditors, such as mortgage lenders, credit card companies, medical providers, and utility services.
3. Mail Notice to Known Creditors
Within 30 days of appointment, the executor must mail each known creditor a Notice of Administration. Creditors then have four months from the date of mailing to file a claim. (See Probate Code § 9100.)
4. Publish Notice to Unknown Creditors
If any creditors are not reasonably ascertainable, the executor publishes a Notice to Creditors once a week for four consecutive weeks in a newspaper of general circulation in the county where probate is pending. Publication starts the four-month deadline for unknown creditors to file claims. (See Probate Code § 9120.)
5. Receive and Review Claims
Creditors submit written claims on the court’s standard form. The executor reviews each claim and determines whether it is valid. California Probate Code §§ 9100–9136 govern claim filing and review procedures. (General overview: Probate Code Chapter 9.)
6. Allow or Contest Claims
If a claim is valid, the executor pays it from estate funds. If a claim is disputed, the executor must file a Notice of Rejection with the court before distributing assets. The creditor may then file a lawsuit to enforce the claim.
7. Final Distribution
Once all valid claims are satisfied or rejected and the waiting periods expire, the executor petitions the court for final distribution of the remaining assets to the heirs or beneficiaries under the will or California’s intestacy laws. (See Probate Code Division 6.)
Helpful Hints
- Keep a detailed record of all mailed notices and proof of publication.
- Use certified mail with return receipt for known creditor notices.
- File creditor claims promptly to protect the estate and minimize disputes.
- Consult the local newspaper’s classified section for publication requirements.
- Maintain clear communication with heirs about the status of claims and distributions.