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In foreign law, does the estate include the deceased's obligations?

Discussion in 'Estate Planning, Creating Wills & Trusts' started by Nguyen, May 12, 2021.

  1. Nguyen

    Nguyen Law Topic Starter New Member

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    Hi everyone,
    I'm from Japan. I'm doing a research about estate law.
    In my country's law, the estate include the deceased's obligations.
    Can i know in other countries law, is it the same ?
    If yes, i would really appreciate to know the law source of it.
     
  2. Tax Counsel

    Tax Counsel Well-Known Member

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    The law in each country may be different, of course, and sometimes very different. As there are about 195 countries in the world, I doubt you'll find an answer that is the same for all of them. This site only focuses on law in the U.S. In the U.S., the law of estates and probate is set by the states, not the national government. We have 50 states and estate and probate law does vary a bit among them. However, it is the case in every state of the U.S. that the decedent's estate is obligated to pay the debts that the deceased had at the time he or she died. Those debts are payable only out of the assets of the estate; the decedent's surviving family members (spouse, children, etc) are not personally obligated to pay the debts of the decedent nor are the beneficiaries of the estate personally obligated to pay the debts. Also, the funeral expenses, taxes and debts of the estate all must be paid before any beneficiary receives anything from the estate.

    Because estate and probate law is at the state level, there is no source (legal citation) I can give you that applies to the entire US. However, as one example, California Probate Code section 11420 provides that the estate shall pay debts as follows:

    11420.

    (a) Debts shall be paid in the following order of priority among classes of debts, except that debts owed to the United States or to this state that have preference under the laws of the United States or of this state shall be given the preference required by such laws:

    (1) Expenses of administration. With respect to obligations secured by mortgage, deed of trust, or other lien, including, but not limited to, a judgment lien, only those expenses of administration incurred that are reasonably related to the administration of that property by which obligations are secured shall be given priority over these obligations.

    (2) Obligations secured by a mortgage, deed of trust, or other lien, including, but not limited to, a judgment lien, in the order of their priority, so far as they may be paid out of the proceeds of the property subject to the lien. If the proceeds are insufficient, the part of the obligation remaining unsatisfied shall be classed with general debts.

    (3) Funeral expenses.

    (4) Expenses of last illness.

    (5) Family allowance.

    (6) Wage claims.

    (7) General debts, including judgments not secured by a lien and all other debts not included in a prior class.

    (b) Except as otherwise provided by statute, the debts of each class are without preference or priority one over another. No debt of any class may be paid until all those of prior classes are paid in full. If property in the estate is insufficient to pay all debts of any class in full, each debt in that class shall be paid a proportionate share.
     
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