Can creditors claim the entire estate in Utah probate?
Under Utah law, creditors have claim against the estate of a decedent if the person died with outstanding debts. However, Utah law also provides certain exemptions or allowances which are intended to preserve at least a portion of the decedent’s estate for the benefit of the person’s spouse or minor children.
Utah Code Ann. 75-2-402 provides for a “homestead allowance” in the amount of $22,500 that is exempt from and has priority over all other claims made against the estate. A surviving spouse, or if there is no surviving spouse, surviving minor dependent children of the decedent are entitled to this allowance. If there are more than one minor dependent children, the homestead allowance amount is split equally among those children.
In addition to the homestead allowance, Utah Code Ann. 75-2-403 provides that a surviving spouse (or surviving children if there is no surviving spouse) is entitled from the estate to a value in “household furniture, automobiles, furnishings, appliances, and personal effects.” The value of said chattels (personal property) is not to exceed $15,000 in excess of any security interests therein. If there are not $15,000 worth of exempt property in the estate, the spouse or children are entitled to other assets of the estate, if any, necessary to make up the $15,000 value.
Life insurance is another example of “property” that is typically not subject to creditors’ claims against the estate of a deceased person. Typically, life insurance policies are written in a way that provides for the proceeds of the insurance policy to be paid directly to the beneficiaries of the police. However, if the beneficiary named in the policy is the “estate” of the policy holder, this can make the proceeds of the policy subject to creditors’ claims.