Can I Leave Debt to a Specific Person

David opened a notice from the IRS demanding $85,000 in unpaid estate taxes—and discovered his father’s will left him the responsibility to pay it. This is a surprisingly common scenario, and the fallout can be financially devastating. People often think they can simply “pass on” debt to an heir, but California law is far more complex. As an Estate Planning Attorney and CPA with over 35 years of experience, I’ve seen firsthand how improper estate planning can create unintended burdens for beneficiaries. It’s critical to understand how debt interacts with the estate process, and how to structure your estate to protect your loved ones.

What Happens to Debt After Someone Dies?

When someone passes away, their debts don’t magically disappear. They become obligations of the estate. The estate’s assets—everything the deceased owned—are used to satisfy those debts. This includes bank accounts, real estate, investments, and personal property. However, it doesn’t automatically mean heirs are personally liable. The debts are generally paid from the estate’s funds, not the inheritors’ pockets. It’s a critical distinction, but not a universally applicable truth.

Can You Specify Who Pays a Debt in Your Will?

Technically, yes, you can include a clause in your will directing a specific beneficiary to pay a particular debt. However, this isn’t a straightforward solution. The California probate court has ultimate authority over the estate’s administration. A court will scrutinize such a clause, especially if it appears unfair or leaves the estate with insufficient assets to cover other legitimate claims. A direction to pay a debt is essentially a bequest, and is subject to the same rules as any other bequest. If the estate doesn’t have enough money to fulfill that direction, the bequest fails.

Furthermore, a will provision instructing a beneficiary to pay debt doesn’t legally compel them to do so unless they voluntarily accept the inheritance. They can disclaim the inheritance entirely, leaving the debt for the estate to handle. The problem is that disclaiming the inheritance might not be the desired outcome for either the estate or the potential beneficiary.

What Debts Are Paid First?

California law establishes a mandatory payment order for estate debts, outlined in Probate Code § 11420. This dictates which debts get priority. Generally, secured debts—like mortgages and car loans—are paid before unsecured debts—like credit card bills and medical expenses. Administrative expenses, such as attorney’s fees and executor’s commissions, are often given the highest priority. Funeral expenses and taxes are also high on the list. It’s vital to understand this hierarchy, as it directly impacts how much—if anything—remains for distribution to heirs.

How Does the Formal Creditor Claims Process Work?

Creditors can’t simply demand payment after someone dies. They must follow a formal claims process, as detailed in Probate Code §§ 9000–9399. This involves filing a claim with the probate court within a specific timeframe. The executor or administrator of the estate is responsible for reviewing and validating these claims. This process provides a layer of protection, ensuring that only legitimate debts are paid. It also allows beneficiaries to challenge invalid claims.

What’s the Deadline for Creditors to File a Claim?

There’s a hard one-year deadline for creditors to initiate a lawsuit against the estate—according to CCP § 366.2. This means creditors have one year from the date of death to file a legal action to recover the debt. Importantly, this deadline is NOT tolled by the probate process. Even if the probate case is still ongoing, the creditor’s one-year clock keeps ticking. Missing this deadline bars the creditor from pursuing the estate for payment.

What About Spousal Liability for the Deceased’s Debts?

Spousal liability is a frequent concern. In California, community property debts are generally the responsibility of both spouses. However, separate property debts—those incurred by one spouse before or during the marriage without a community property benefit—are generally the sole responsibility of the debtor spouse. Family Code § 910 and Probate Code §§ 13550–13554 outline the nuances of spousal liability, and it’s a complex area of law that requires careful analysis. It’s critical to remember that a surviving spouse might still be liable for certain debts even if they weren’t directly involved in the initial borrowing.

What if the Estate is Small?

For very small estates—currently defined as those with assets under $208,850 for deaths on/after April 1, 2025, per Probate Code § 13100—a simplified probate process may be available. This often involves a less formal claim process and may allow for quicker distribution of assets. However, even in these cases, creditors still have rights and debts must be addressed appropriately.

Why a CPA-Attorney is Your Best Defense

As a CPA as well as an estate planning attorney, I bring a unique perspective to debt and estate planning. Understanding the step-up in basis, capital gains implications, and proper asset valuation is crucial for minimizing tax liabilities and protecting your heirs. Leaving debt to a specific person may seem like a viable option, but without careful planning and a thorough understanding of California law, it can create far more problems than it solves. It’s essential to work with a qualified professional to ensure your estate plan is robust and effectively addresses your individual circumstances.

How do California courts decide whether a will reflects true intent or creates ambiguity?

In California, a last will and testament is reviewed under probate standards that focus on intent, capacity, and execution. Clear drafting reduces ambiguity, limits misinterpretation, and helps families avoid unnecessary conflict during estate administration.

• Authority: Define executor duties clearly.
• Protection: Establish guardian nominations for minors.
• Location: Confirm domicile requirements.

When a will is drafted with California probate review in mind, it becomes a stabilizing roadmap rather than a source of conflict. Clear intent, proper authority, and compliant execution protect both families and estates.

Controlling California Statutes on Estate Debts and Creditor Claims

• Debt Priority:
  
  California Probate Code § 11420
  
  Establishes the mandatory statutory order in which estate debts must be paid before any distributions to beneficiaries.
• Probate Creditor Claims:
  
  California Probate Code §§ 9000–9399
  
  Governs how creditor claims must be formally filed in probate and why informal demands, letters, or invoices are legally ineffective.
• Creditor Lawsuit Deadline:
  
  California Code of Civil Procedure § 366.2
  
  Imposes a strict one-year deadline from the date of death for most creditor lawsuits, which is not tolled by probate proceedings.
• Surviving Spouse Liability:
  
  California Probate Code §§ 13550–13554
  
  Limits a surviving spouse’s personal liability for a decedent’s debts to the value of property received under these statutes.
• Small Estate Threshold:
  
  California Probate Code § 13100
  
  Sets the $208,850 small estate affidavit threshold for deaths occurring on or after April 1, 2025.