The California Probate Process
WHAT IS THE CALIFORNIA PROBATE PROCESS?
Probate is an often complicated process whereby a person's legal and financial affairs are resolved after death and assets ultimately transferred to their rightful beneficiaries. In California, for estates larger than $100,000, probate generally requires court supervision. These proceedings usually take a minimum of six months, but if complex and disputed, could take several years.
WHY DOES THERE HAVE TO BE A PROBATE?
Probate may not be necessary if the person who died had taken the required legal steps to structure their estate in an appropriate manner to avoid court supervision post-death. However, under many circumstances, estate planning and trust formation alone do not prevent probate.
Probate allows an estate of the deceased individual (the "Decedent") to be distributed either pursuant to a Will or if there is not a Will then according to the California intestate laws. Probate serves as a way to transfer assets, resolve debts and clear title so assets can be transferred to their rightful beneficiaries.
WHO IS INVOLVED IN THE PROBATE PROCESS?
- "Decedent" is the person who died. If the decedent made a Last Will and Testament or Trust before death, he or she may also be referred to as a a "Testator."
- "Executor" is the person who carries out the decedent's wishes as expressed in the Will. The Decedent has usually nominated this person to serve as the Executor in the Last Will and Testament. The Executor is the person who hires us to assist with the Probate process. A female Executor may sometimes be referred to as an "Executrix."
- "Administrator" is used when the Decedent died intestate (i.e. without having prepared a Will) and is appointed by the probate court to administer the Decedent's estate. For all intents and purposes, executors and administrators serve the same function.
- "Beneficiary" is the person or persons who are entitled to the Decedent's assets after resolving all of the Decedent's proper debts and last expenses. Beneficiaries are usually designated in the Will and are most oftentimes the Decedent's "heirs." If the Decedent had no Will or there is a proper challenge to the Will, California law of intestate succession determines the rightful beneficiaries according to a distribution scheme set forth in the California Probate Code.
WHAT ARE THE STEPS TO PROBATE?
Although every Probate is different, Probate usually involves the following steps:
- Obtain and review Will (if applicable); Petition Court to appoint proper executor or administrator
- Identify, collect and protect the Deceased's assets
- Formally notify creditors and certain government agencies per California and federal law and either pay or contest debts as appropriate
- File all required papers with the California Probate Court, including inventory and appraisal forms, formal accounting, and other legal documents. Seek court order for distributing the estate to the rightful beneficiaries
- File the Decedent's final tax return and pay taxes owed, if any.
- Supervise final distribution of assets to the heirs, obtain court receipts, attend a court hearing, and obtain court order discharging the executor from further responsibility
Probate is generally filed in the probate court the county in which the decedent resided.
When a probate is filed in California, known creditors are supposed to be given notice. There is creditors' claim period wherein creditors have four months to present their claims. That is the biggest single reason that probates take as long as they do.
CAN SOMEONE CONTEST A WILL
Yes. That does not mean he/she will be successful.
IS THERE A LINK BETWEEN PROBATE AND ESTATE TAXES
Estate taxes are for those estates over $2,000,000 (2007-2008) regardless of whether there is a probate or not. On the other hand, the vast majority of probates are for estates less than $2,000,000.
WHAT HAPPENS DURING A PROBATE
We seek court approval for appointment of someone to handle the decedent's legal and financial affairs. If there is a will, there is usually someone nominated to fill that role called an executor or executrix. If there is no will, the California Probate Code provides a list of persons who have priority to petition to fill that role.
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 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, however, 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?
It depends on the size of the estate and length and complexity of administration. California Probate Code section 10810 sets the maximum statutory fees that attorneys can charge for a probate; however, higher fees can be ordered by a court for more complicated cases (litigated disputes, tax problems, etc.) Under normal circumstances, 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.
The fees listed below are the California statutory fees used to compensate attorneys and executors in probate cases for various sizes of estates. If both the attorney and the executor receive a fee, the amount paid will be double that shown below. The value of the estate is determined, in general, by the inventory for the estate. (If an accounting of the estate has been waived, the total value of the estate for attorney's fees purposes is the inventory, plus gains on sales, minus losses on sales.) Debts are not included in determining attorney's fees.
| Estate Value | Statutory Fee |
|---|---|
| $100,000 | $4,000 |
| $200,000 | $7,000 |
| $300,000 | $9,000 |
| $400,000 | $11,000 |
| $500,000 | $13,000 |
| $600,000 | $15,000 |
| $700,000 | $17,000 |
| $800,000 | $19,000 |
| $900,000 | $21,000 |
| $1,000,000 | $23,000 |
| $2,000,000 | $33,000 |
In addition to the fees shown above, the filing fees charged by the Superior Court vary, depending on the size of the estate. Some representative fees are as follows:
| Size of Estate | Court Filing Fee |
|---|---|
| Under $250,000 | $320 |
| $250,000 to $500,000 | $385 |
| $500,000 to $750,000 | $485 |
| $750,000 to $1 million | $635 |
| $1 million to $1.5 million | $1,135 |
| $1.5 million to $2 million | $2,135 |
| $2 million to $2.5 million | $2,635 |
| $2.5 million to $3.5 million | $3,635 |
APPRAISAL OF THE ESTATE
Estates are appraised by probate referees to determine the fair market value of the asset. The fair market value includes mortgages and other debts, which can result in an appraisal of the property that is higher than the equity that the deceased owned in the property. Probate referees receive a fee based on .1 percent of the assets that have been appraised.
COURT COSTS
In addition to the statutory fees, there are costs for appraisal fees, publication costs, and miscellaneous fees charged by the county. A typical estate might incur $1,000 to $3,000 in court costs and other mandated fees.
ADVANTAGES OF PROBATE
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
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.
PROBATE ALTERNATIVES IN CALIFORNIA
Sometimes there does not have to be a "full probate." In California, there are various alternatives that, depending on the situation, may eliminate the need to actually participate in the "full" probate process. For estates not exceeding $100,000 of "personal property" (as opposed to real property), there is an affidavit procedure that can be used on behalf of the heirs to avoid a "full" probate.
For estates wherein the total gross value of all of the deceased real property does not exceed $20,000, there is also an affidavit procedure that can used on behalf of the heirs to avoid a "full" probate.
There is an abbreviated court process that can be used when the real property is under $100,000. It is less costly and much quicker than a formal probate.
A surviving spouse or registered domestic partner that is the sole heir to all or part of the estate may file a special petition that is also generally less costly and much faster than a formal probate.
The attorneys at the SAN DIEGO PROBATE CENTER are familiar with all of these alternatives and can provide the legal guidance to assist you in selecting the most efficient process.
The San Diego Probate Center™ employs attorneys who are experienced in probate and trust administration serving the Counties of San Diego, Orange, San Bernardino, Riverside, Los Angeles, and Imperial in California. If you have any questions about probate, wills and trusts, please contact us through our online form or call us at 1-866-WILL-911 for a free consultation.