Probate is one of those words that makes most people shudder, yet when asked to define it, they can’t quite do so. We’d like to shed some light on the issue of Probate for you.
But, before you get too deep into trying to understand all of this…we’re also happy to let you know up that if you allow us to work with you, your estate likely won’t have to land up in Probate. (Sometimes it’s good to go through Probate though. Especially if the estate has many creditors.)
By hiring us to plan and carry out good and proper Estate Planning, you can avoid putting your loved ones through the tedious steps and the expense of Probate.
What is Probate?
When a California resident passes away, leaving a Will behind — or without leaving a Will and not otherwise having the contents of his or her Estate clearly defined with a properly written plan to distribute them in place — a court process called Probate is necessary.
In this process, the value of each of the deceased’s assets is officially assessed and the title of each of the deceased’s assets is legally transferred to a Beneficiary. And, all of the deceased person’s assets become a matter of public record.
There are many steps involved in Probate. In fact, for the friend, loved one, or court-appointed person responsible for handling the Probate, there are about 13 major steps, most with many sub-steps and potentially a lot of research and appraisals. If you’d like to have an idea of those steps, you can visit our Probate Administration page.
Probate is not fun — and it can take 9 months, a year and a half, and even longer. It can also be quite costly, eating away at the very estate in question. This cost in California depends on the total estate value for administration fees, so it is difficult to state an accurate average. (Across the country, it ranges from 2% – 7% but in California it is more like 10% including both attorney and personal representative.) On top of this there are court filling fees and the fees to assess the values of the assets.
The exact steps and cost of all the filings, notices, out-of-pocket fees reimbursed to the representative, sales, etc depends on the actual estate and its location, the number of family members and associates, debts, etc.
The most common reaction people have to seeing the steps involved in a Probate is to know they want their Beneficiaries — whether loved ones or charities — to not have to go through it.
People also tend to dislike the idea of their assets becoming a part of public record. Not because they have something to hide, but because it’s so invasive. The itemizing and assessment, and the entire process, can be exhausting.
Happily for most, there are perfectly legal and legitimate ways to avoid putting your Estate through Probate. The most common way is to set up a Trust. We explain this on our Trusts page. But a trust can have a downside, too.
By having us work with you to set up your estate properly — and keep it up to date with regular reviews — you avoid all of this. There will still be legal court process but your estate will be set up for the most efficient transfer, saving you time, worry, stress, and, of course, the court expenses.
An Estate Plan can pay for itself
Considering the steps and costs of Probate, you’ll start to see that the fee you pay to us have you get your papers in order is greatly mitigated. By investing in Estate Planning services up front, you save your heirs both money and time after you’re gone.
When you hire us, we can explain the pros and cons of every way there is to transfer property at death and set the estate up the most efficient way.
Will Probate be necessary?
Probate isn’t always necessary or can be minimized with the right planning, such as the set-up and funding of a Trust (which we explain on our Trusts page). Our goal as we work with you is to eliminate or minimize Probate.
It isn’t typically necessary if you leave behind a person who has a clear legal right to inherit your assets — and you don’t own real property (a house, land, other buildings) and you leave behind bank accounts, stocks, and life insurance under $150,000. (Cars, motor homes and some other possessions don’t count.)
Not all assets need to go through Probate.
These non-probate assets are exempted:
- Property for which the title is under “Joint Tenants with Right of Survivorship” simply passes to your co-owners, but very important forms must be filed with the county in which you died in order to obtain favorable property tax determinations.
- Retirement accounts such as IRA and 401(k) accounts — if you have set up Designated Beneficiaries.
- Life insurance policies
- Bank accounts — if you have designated someone to “Pay on Death” (POD) or “In Trust For.”
- Property designated as owned by a Living Trust so that the title simply passes to successor trustees.
If someone you love or been involved with, passed away making it necessary for you to go through Probate, we can help as well. We are well-experienced at representing Executors and Beneficiaries (Heirs) of Estates.