What is Probate?

What is Probate?

Probate is the process where a decedent’s assets are collected, creditor claims are paid, assets are appraised, tax returns get filed, and then the remaining assets are distributed to the estate’s beneficiaries as per the Court ruling.

Probate is an expensive and time consuming process. Fees for Probate are set forth by the State of California (see below).  This process can take a few months and up to two years or more, depending on litigation and claims. Additionally, Probate is a public process in which anyone can lay claim to the estate.

When does REAL PROPERTY have to go through Probate?

Real property must go through Probate when someone dies and holds any interest in title in their sole name. Naming or listing real property in the Declaration of Trust is NOT sufficient.  The Deed to the real property must be titled in the name of the Trust.

What are the steps to go through Probate?

California has a formal probate process where a judge presides over the process and ultimately decides who is the owner of the property.  The steps typically followed in probate are as follows:

  • The filing of a Petition in court with a request to admit the decedent’s will to probate
  • The publication of notice in the newspaper
  • The mailing of notice to the estate beneficiaries and heirs of the decedent
  • Attendance at the hearing in which the Judge will grant or deny the Petition
  • The posting of a bond
  • The inventory and appraisal of assets
  • Paying creditor claims
  • Filing a final account for approval with the court
  • Distribution of assets

How much does Probate cost in California?

The fees for a Probate vary based on the estate value.  Fees are usually between 3-8% of the total estate value with a majority of those fees going to the attorney for personal representation. While fees due to the Courts can be upwards of $500.00 per document filed, the maximum allowable fees paid to the attorney are based on a percentage set forth by the State of California.  Current (2022) fees are as follows however, these fees can be adjusted periodically:

  • Four percent on the first one hundred thousand dollars ($100,000)
  • Three percent on the next one hundred thousand dollars ($100,000)
  • Two percent on the next eight hundred thousand dollars ($800,000)
  • One percent on the next nine million dollars ($9,000,000)
  • One-half of 1 percent on the next fifteen million dollars ($15,000,000)

For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court.

As an example, a property worth $800,000 will cost $19,000 in attorney fees plus any fees due to the court for filing documentation.

How can Probate be avoided?

You have several options when it comes to avoiding Probate.

  • Holding title as a Joint Tenant or as Community Property with Right of Survivorship with your spouse
  • Holding title as a Joint Tenant with another person or persons (must be equal interests)
  • Holding title in a Living Trust
  • Naming an heir(s) via a Revocable Transfer on Death Deed (RTOD)

What does it mean to hold title as Joint Tenants or Community Property with Right of Survivorship?

Joint Tenants or Community Property with Right of Survivorship are both forms of vesting in which upon one person’s passing, the surviving person(s) on title will automatically obtain the deceased person’s interest. Joint Tenancy infers ‘with Right of Survivorship’ in California.

Spouses are able to hold title as either Joint Tenants or Community Property with Right of Survivorship. The two different ways to hold title have different tax implications. You should seek tax advice from a tax professional in order to select the correct vesting for your situation.

What is a Living Trust?

A Living Trust is a form of estate planning that allows the Trustor (owner) to control their assets while still alive but will then dictate how the assets are to be distributed upon the passing of the Trustor. This is done through a process called Trust Administration. Trust Administration is a process completed by a Trustee appointed by the Trustor. The Trustee should hire a professional who understands how title works.

The basic documents that comprise a simple Living Trust Estate plan are:

  • Declaration of Trust
  • Last Will and Testament
  • Durable Power of Attorney
  • Health Care Directive

What is a Revocable Transfer on Death Deed?

The Revocable Transfer on Death Deed is a document which allows the owner of real property to name an heir(s) to their home and/or investment properties.  Click here for information on the Revocable Transfer on Death Deed.

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