A couple of days ago I posted about why you should probate a Last Will or Administer an estate. However, today I encountered a situation in which probating was not the correct move.
My client’s parent had died recently. Her father owned a small plot of land with a worn-out mobile home. He also owned several bank accounts (on which his daughter was a joint owner.) However, her father had a lot of debts resulting from some failed business ventures. These debts greatly exceeded the value of the lot and mobile home.
I recommended they NOT probate. Why should they do the work for these probable creditors? Why expend good money after bad?
Remember that the bank accounts pass outside probate and therefore are not subject to the claims of the creditors. The creditors generally can only attach assets which pass through probate. If they probated the estate to get the land, the creditors would get paid first. In all likelihood, no assets would pass to the children.
If the creditors want the land, let them pay their lawyers to initiate the estate and cover the expenses. And if they don’t, then it is possible for the heirs to buy the land at a tax auction free from the claims.
