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  1. #1
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    Jan 2018
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    Default Settling Debt for a Very Tiny Estate

    My question involves estate proceedings in the state of: CA

    The mother of a friend of mine died 10 weeks ago.

    She left a very tiny estate, of $3,000 in cash and a vehicle with a value of $6,000.

    She also left some debts

    Remaining debt on the vehicle $3,300

    Short term loan A $530
    Short term loan B $6,800

    Store card A $920
    Store card B - unknown, but no more than $1,000
    Store card C - $600

    Total debt
    Secured $3,300
    Unsecured $8,850 - $9,850

    Total debt $12,350 - $13,550

    My friend wants to know how much he can collect, given that her debt exceeds her estate.

    What should be done about it? Thank you

  2. #2
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    Default Re: Settling Debt for a Very Tiny Estate

    The process of transfer of assets by affidavit does not work with vehicles. If he probates the estate, the estate can sell the vehicle, pay off the loan, and provide notice to creditors. The priority debts for the estate will be funeral and burial costs, and the cost of administration, which will likely consume most or all of the @$5,700 in estate assets.

  3. #3
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    Jan 2018
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    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting Mr. Knowitall
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    The process of transfer of assets by affidavit does not work with vehicles. If he probates the estate, the estate can sell the vehicle, pay off the loan, and provide notice to creditors. The priority debts for the estate will be funeral and burial costs, and the cost of administration, which will likely consume most or all of the @$5,700 in estate assets.
    He paid the funeral costs from his own pocket so that is not an issue. I believe the estate is too tiny for CA probates, which is why I am asking this question.

  4. #4
    Join Date
    Sep 2010
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    18,232

    Default Re: Settling Debt for a Very Tiny Estate

    No estate is too tiny for probate. There exists a simpler procedure that CAN be used for small estates.

  5. #5
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    Jan 2018
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    Default Re: Settling Debt for a Very Tiny Estate

    This is what i have found for tiny estates

    >The California Probate Code provides that probate estates of $150,000 or less do not need to be probated

    Instead the heir could issue an affidavit. Do you think a probate is still needed?

    There is no other heir, the funeral cost already paid, and my friend just wants to know whether he can collect the sum from the sale of the vehicle which is the only asset in play, and going into probates will probably consume all of the proceeds.

    Is there a good way to end this asap without too much pain and expenses?

  6. #6
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    Default Re: Settling Debt for a Very Tiny Estate

    The process for transferring a vehicle by affidavit is possible in some cases, but it is not necessarily the case that the vehicle can be transferred by affidavit even if the estate is small, and it is first necessary to pay off or discharge any car loan as well as to certify that you have paid off or otherwise resolved the estate's debts to any unsecured creditors; see the DMV form for that purpose.

  7. #7
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    Oct 2006
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    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting ceeeffoh
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    This is what i have found for tiny estates

    >The California Probate Code provides that probate estates of $150,000 or less do not need to be probated

    Instead the heir could issue an affidavit. Do you think a probate is still needed?

    There is no other heir, the funeral cost already paid, and my friend just wants to know whether he can collect the sum from the sale of the vehicle which is the only asset in play, and going into probates will probably consume all of the proceeds.

    Is there a good way to end this asap without too much pain and expenses?
    Yes, because the estate is insolvent he could just walk away from it.

  8. #8
    Join Date
    Jan 2018
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    8

    Default Re: Settling Debt for a Very Tiny Estate

    He paid for the funeral himself so it is not part of the equation.

    Quote Quoting llworking
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    Yes, because the estate is insolvent he could just walk away from it.
    Is it the only solution for this problem? How can he do that? Also how about the car which is in limbo?

  9. #9
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    Jan 2018
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    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting Rock Knocker
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    If your friend has no interest in being reimbursed for the funeral expenses ( which I pointed out he is entitled to with higher priority than all other known debts other than the car loan), he can notify the lender of the car and return it to them, then walk away. The car lender will sell the vehicle and recoup their funds, and after they are done siphoning additional costs for the repossession, there will be a small amount for the unsecured creditors to fight over.

    That is if he wants to do the absolute minimum. There is nothing in the estate for him unless he goes thru probate and pay him self back for the funeral as per https://leginfo.legislature.ca.gov/f...er=2.&article=
    Thank you. I told all the issues to my friend, who said he will call the creditors and will try to settle this matter before the car, which is basically everything in the estate, is sold.

  10. #10
    Join Date
    Oct 2006
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    Default Re: Settling Debt for a Very Tiny Estate

    Quote Quoting Rock Knocker
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    He can get reimbursed for the funeral and death expenses if he doesn't walk away, because those are higher in the food chain than unsecured debt
    That is true, if the estate can be settled without any real cost to do so. If there is going to be cost involved, he might be better off walking away.

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