Probate

What is Probate?

Probate in California is a legal proceeding used to wind up a person’s legal and financial affairs after death.

In California such probate proceedings are conducted in the Superior Court for the county in which the decedent lived, and can take at least eight months and sometimes as long as several years.

Purpose of Probate in California

Two of the primary purposes of a probate are to ensure that the creditors of the deceased person (the “decedent”) are paid and that the decedent’s assets are distributed on the terms and conditions stated in the decedent’s will.  If the decedent did not have will, a probate is still usually required for adminstration of the estate under probate laws.

Probate starts with filing the decedent’s will and a “petition” request with the court to start the proceeding and formally appoint an executor.  All known or “reasonably ascertainable” creditors of the decedent must be sent written notice of the decedent’s death so they can file their claims.

What happens during a Probate in California?

The person who is nominated in the will as executor files a petition with the Superior Court asking that he or she be appointed as executor.

If there is no will, the Probate Code provides a list of persons who have priority to petition to become administrator.  The will also is filed with the petition, and notices are sent to the heirs and/or relatives to let them know when the hearing will be held.

If there are objections to the petition, or if the validity of the will is contested, the court hearing will be used to resolve any problems that have arisen.  In some cases this may mean that the validity of the will is not upheld, or that some other person than the original petitioner is chosen to administer the estate.  In most cases there is no objection, and the petition is granted.

The executor then makes an inventory of the estate’s assets, locates creditors, pays bills, files tax returns, and manages the estate assets.

When all of the duties of the executor are completed, another petition is filed with the court asking that the estate be distributed to the heirs.  If this petition is granted, the estate administrated is completed by distributing the assets to the heirs and filing final tax returns.

How much does Probate cost?

California Probate Code section 10810 sets the maximum statutory fees that attorneys can charge for a probate.  Higher fees can be ordered by a court for more complicated cases.  The fees are four percent of the first $100,000 of the estate, three percent of the next $100,000, two percent of the next $800,000, one percent of the next $9,000,000, and one-half percent of the next $15,000,000.  For estates larger than $25,000,000, the court will determine the fee for the amount that is greater than $25,000,000.

Advantages of Probate in California

The proceedings are controlled by a judge who can decide disputes between heirs or between the heirs and the executor.  Creditors are required to submit their claims against the estate within a four-month period, provided they have been notified of the probate.  The executor is required, in most cases, to prepare an accounting and report of the executor’s activities.

Disadvantages of Probate in California

The cost is usually much higher than would be required for the administration of a living trust for an estate valued at the same amount. It usually takes longer to probate an estate than to administer a trust. Most estates don’t need the supervision of the court unless disputes occur.

Avoiding Probate in California

Many estates do not need to be probated.  A person with assets should be careful and do estate planning while considering to use a “Revocable Living Trust”.

Does the Probate Process always go through Court?  

California probate courts are only needed if the total value of the real property and other policies such as life insurance exceed $150,000.  In order to determine whether transfer belongs in CA probate court or not, you should establish the value of all the real and personal property while excluding:

•  Cars and boats
•  Property outside of CA
• Property held in trust
• Property held through a joint tenancy
• Property that automatically passed to a spouse or domestic partner
• Unpaid salary and other compensation owed to the decedent up to $5,000
• Debts and mortgages of the decedent
• Joint bank accounts

If the total value of all personal and real property excluding the items above is below $150,000, you may transfer personal property by writing an affidavit after 40 days from the death.  If the value exceeds $150,000, the transfer of property will be brought to CA probate court, and there are number of steps that must be taken within a California probate court.

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Professional REALTOR® agent representation and help for administrators and executors, attorneys, estate planners, income tax professionals, fiduciaries, trustees and heirs, with listing and sale of trust and probate estate properties at Orange County, CA

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This is for information only and not the providing of legal or tax services.  You should consult with a lawyer or income tax professional prior to making any decisions about your own estate planning and probate.

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