My dad died and put all real estate in a trust. Only one real estate is free of liens. The rest are being surrendered in deed in lieu of foreclosure. He only has enough cash in the Trust to pay IRS, CA FTB and expenses for preparing his San Diego House for the DIL. The only home free of liens is our childhood home on Guam. It is in need of some costly renovations so selling it would not be easy unless we just gave it away. Most of the beneficiaries do not want to sell it. I had one credit card collector tell me they will be filing a claim against the Trust and the asset may have to be sold unless the beneficiaries agree to pay out of their own pocket. Another credit card company said they would only be able to file claims if probate was opened so the Trust could distribute the Asset
Estate Planning Attorney
I think you are asking whether the revocable trust of a California resident may be liable for Decedent's debts.
Yes. Trustee would be the one "on the hook" if he/she distributes assets without paying outstanding debts.
That being said - I think you are saying that there are no assets whatsoever other than Guam after the tax bills get paid, correct?
I can't imagine what credit card company would want to have to "chase" the Trustee to get a lien on property on Guam. Any other attorney is encouraged to post on that topic.
If the property in Guam is worth keeping / giving to beneficiaries - then maybe just approach creditors saying your father left now savings/bank balance after paying taxes, and his home was foreclosed/in lieu. Tell them that you will pay 10% (or negotiate et al) to clear your father's debts - again if it is worth it.
This does not create an attorney/client relationship. This does not constitue legal advice. It is limited to facts of the question. You should consult an attorney in the appropriate state involved before making any decisions based on this answer
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I am sorry for your loss. If your father owed money on his credit cards, he could not transfer away his assets to avoid his own creditors. You need to consult your own attorney to protect your legal rights.
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Estate Planning Attorney
I'm sorry for your loss. Normally the creditors can only come after the assets held in the estate, so if there is no cash in the estate, they may have to wait for a sale to cover those debts. Having said that, quite often the creditors will negotiate down the debt in order to get paid, especially in these days when most real estate has lost value and the estates are much smaller than in past years.
Is the Guam property held in your father's U.S. trust, or is the another Will or trust which was set up in Guam to handle that asset? This may make a big difference, if he has a Guam Will and will have an estate over there. You should consult with an attorney who handles international estates - they may have more specific information and tips on handling your father's Guam residence.
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