If you found this blog post you probably have a question about restitution payments in a probate. I am a California attorney so my blog can only give information about California probate law. If you are in any other state you might take my information and share with an attorney in that state to see what they think.
I have dealt with restitution payments in California probates many times. There are two main ways:
RESTITUTION PAYMENTS – BENEFICIARY
In the first situation a beneficiary, or heir, of the decedent is incarcerated and owed money (i.e. restitution) for a crime they committed. Any time we have an heir or beneficiary incarcerated in a probate we put the California Victims Compensation office on notice. If that heir or beneficiary owes money they file a claim against the estate. Basically they get paid before the beneficiary does. In my experience, and I have seen this at least 25 times, the amounts tend to be fairly low. I can only think of a few that were over $5,000 in fact. The nice thing for the beneficiary is when they get out of prison their restitution will be paid off so they don’t have to worry about it. So it’s a win-win! So in the final petition when we show the payments it might look like this:
Assets left to distribute: $50,000
Assets to John Dough: $25,000
Cash to John Dough: $25,000
Assets to Bobby Dough: $25,000
Cash to California Victims Compensation Fund: $5,000
Cash to Bobby Dough: $20,000
RESTITUTION PAYMENTS – DECEDENT
The far less common situation is when the person who died (i.e. the decedent) was owed money from restitution for a crime committed against them. After 1,500 or so probate cases I have only seen this come across my desk twice that I remember. I thus would guess most probate attorneys have not seen this one. How do you deal with this? It’s actually really simple. We treat the restitution payment, or future payment as the case probably is, as an “asset” and inventory it in the estate. That is, on the estate inventory of assets there might be a house, some stocks, money in the bank and a restitution payment. We include the restitution on attachment 2 for the probate referee to value. So a hypothetical Inventory and Appraisement, attachment 2, might look like this:
Notice I put the restitution value at $0.00. Why is that? I have noticed that the probate referee determines the likelihood of collection so low, and so remote, that they value it very low if not zero. It could have a positive value as well but here I wanted the extreme of zero to emphasize it’s still really important to include even if not technically worth anything. That is, the key here is you are including it as an “asset” of the estate and thus you can include in the final probate accounting, or final petition, so that it will show being distributed to the beneficiary or heir. You would then send a copy of the final order to the agency that handles the restitution payments.
I hope this helps but please feel free to reach out if you have a more specific question.