When you begin your journey in to Los Angeles County Probate, you may come across practical questions that require answers but that are beyond basic or border on advanced issues but which should be reviewed by a Los Angeles County Probate counsel. Practical sides of estates and trusts involve gathering of assets and tending to the creditors of the estates or trusts.
Where things get complex in our county probate cases is first telling the difference between a creditor of the deceased person versus the ongoing expenses of probate. Executors who handle claims should have an extensive file on addressing payments.
QUESTION: Should I continue to pay the gardener, even though his has a creditor claim?
ANSWER: Yes. The gardener’s claim is a separate item that the ongoing gardening expense. You should pay for the ongoing gardening expense since failure to do so will devalue the property on sale or creating additional and unnecessary expenses to the estate to plant the garden.
QUESTION: What should I do about a lawsuit that was started before death of my father?
ANSWER: You should determine pretty quickly if the claim is one that is covered by insurance, and communicate that claim to the insurer. Next, once you are appointed, you should send out the notice to creditor and though some claims are exempt from a filing requirement. Because the Probate Code treats claims covered by insurance and limits the claim under certain circumstances, you should pay close attention to what happens to this type of claim. If you fail to follow the claims notice requirements, you have effectively allowed the plaintiff to go over the insurance coverage amount. You should explore whether there is coverage by the homeowner’s insurance or other insurances of your father covering the claim. This sometimes requires review of the various insurance policies and discussion with a coverage attorney. Keep paying the insurances and be sure to purchase any available insurance policies after death. You must inform the insurance company to make sure there is coverage.
Probate Code 9390
(a) An action to establish the decedent’s liability for which the decedent was protected by insurance may be commenced or continued under Section 550, and a judgment in the action may be enforced against the insurer, without first filing a claim as provided in this part.
(b) Unless a claim is first made as provided in this part, an action to establish the decedent’s liability for damages outside the limits or coverage of the insurance may not be commenced or continued under Section 550.
(c) If the insurer seeks reimbursement under the insurance contract for any liability of the decedent, including, but not limited to, deductible amounts in the insurance coverage and costs and attorney’s fees for which the decedent is liable under the contract, an insurer defending an action under Section 550 shall file a claim as provided in this part. Failure to file a claim is a waiver of reimbursement under the insurance contract for any liability of the decedent.
IMPORTANCE OF PROBATE CODE SECTION 550 relating to litigation of claims covered by insurance of the decedent is shown in the next few paragraphs. You should watch for the claims period and also for the one year anniversary of the death of the decedent.
LITIGATION INVOLVING DECEDENT: What happens to the liability of the decedent covered by insurance? The answer depends on whether the claim is made properly and timely, plus whether the plaintiff seeks damages exceeding the insurance policy amount.
PROBATE CODE 550.
(a) Subject to the provisions of this chapter, an action to establish the decedent’s liability for which the decedent was protected by insurance may be commenced or continued against the decedent’s estate without the need to join as a party the decedent’s personal representative or successor in interest.
(b) The remedy provided in this chapter is cumulative and may be pursued concurrently with other remedies.
PROBATE CODE 551
Notwithstanding Section 366.2 of the Code of Civil Procedure, if the limitations period otherwise applicable to the action has not expired at the time of the decedent’s death, an action under this chapter may be commenced within one year after the expiration of the limitations period otherwise applicable.
PROBATE CODE 552
(a) An action under this chapter shall name as the defendant, “Estate of (name of decedent), Deceased.” Summons shall be served on a person designated in writing by the insurer or, if none, on the insurer. Further proceedings shall be in the name of the estate, but otherwise shall be conducted in the same manner as if the action were against the personal representative.
(b) On motion of an interested person, or on its own motion, the court in which the action is pending may, for good cause, order the appointment and substitution of a personal representative as the defendant.
(c) An action against the estate of the decedent under this chapter may be consolidated with an action against the personal representative.
PROBATE CODE 553
The insurer may deny or otherwise contest its liability in an action under this chapter or by an independent action. Unless the personal representative is joined as a party, a judgment in the action under this chapter or in the independent action does not adjudicate rights by or against the estate.
PROBATE CODE 554
(a) Except as provided in subdivision (b), either the damages sought in an action under this chapter shall be within the limits and coverage of the insurance, or recovery of damages outside the limits or coverage of the insurance shall be waived. A judgment in favor of the plaintiff in the action is enforceable only from the insurance coverage and not against property in the estate.
(b) Where the amount of damages sought in the action exceeds the coverage of the insurance, subdivision (a) does not apply if both of the following conditions are satisfied:
(1) The personal representative is joined as a party to the action.
(2) The plaintiff files a claim in compliance with Section 9390.
PROBATE CODE 555
(a) This chapter does not apply to an action commenced before July 1, 1989.
(b) The applicable law in effect before July 1, 1989, continues to apply to an action commenced before July 1, 1989, notwithstanding its repeal by Chapter 1199 of the Statutes of 1988.
Do you have advanced questions about Probate in Los Angeles County? Call Mina Sirkin, Probate Specialist at 818.340.4479 or email us here.