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Need Probate?

Have you been told that you need “Letters Testamentary” in order to access your loved one’s accounts? Then that generally means that the institution you are dealing with needs legal documentation from the probate court.

Generally, a probate is required when the person who passes away holds title to assets in their name alone which have a cumulative value in excess of $100,000.

Typically, the following assets would NOT need to go through a probate: (1) Assets held in joint tenancy (if the remaining joint tenant is still alive); (2) Accounts held as “Pay on death” or “in Trust for” accounts; (3) Retirement accounts which pass to a living designated beneficiary; (4) Life Insurance proceeds which pass to a living designated beneficiary; and (5) Assets titled in a Trust. (more)

Probate Information Center

imageIn California, Probate is handled in the California Superior Courts; it is a court procedure that includes transferring a deceased person's assets to the beneficiaries listed in their will, proving the validity of the will; inventorying and appraising the estate property; paying any debts or taxes (including estate taxes); distributing the property as directed by their will or state law if there is no will.

If a loved one passes away, and probate is necessary, the Court will need to appoint someone to manage the estate. "Personal Representative" is the generic legal term used to describe the “Administrator” (if there is no will) or “Executor” (if there is a will) appointed to oversee an estate. The Personal Representative is responsible for administration of the will and for initiating and maintaining communication with beneficiaries of the estate.

The process of probate administration is made substantially easier, and safer, when a California probate lawyer is made part of the process helping to guide your estate through the system. The experienced probate attorneys at Morgan Law Group regularly assist clients with California probate administration and make it as easy as possible to navigate the probate process.

Here are the most commonly asked questions about Probate in California. If you have additional questions, request our E-Guide or contact us for an individualized Case Review.

What is Probate?

Probate in California is a court supervised process that is used to wind up a person's legal and financial affairs after death, usually overseen by probate lawyers in California. Probate includes gathering a deceased person's assets, proving the validity of the will; appraising the estate property; paying creditors (including estate taxes); and then distributing the property as directed by will or state law if there is no will.

California probate is the process of determining the rights and obligations of a person’s legal and financial matters after their death. Probate is the way to transfer assets, resolve debts and clear title so the decedent’s assets can get to the rightful heirs. Often, it is a complicated and time-consuming process. For estates larger than $100,000, court supervision is helpful, in order to oversee the process and approve the distributions.

How is a Probate Started in California?

imageAlthough any beneficiary or creditor can initiate probate, normally the person named in the will as the Executor starts the process by filing the original will with the court and filing a Petition with the probate court. If there is no will, typically a close relative of the decedent who expects to inherit from the estate will file the Petition.

How is the Executor Chosen?

If the decedent had a will, the person named in the will as the Executor will serve, if eligible. If that person is unable or unwilling to serve as Executor, or if there is no Will, then any interested family member or person can petition the Court to be the administrator of the Estate.

How does the Executor Get Paid?

California law provides that the Executor gets paid according to a compensation schedule, based on a percentage of the assets of the probate estate.

Could I Be Held Personally Liable For Making a Mistake as an Executor?

Being an Executor is a big responsibility. California’s probate code contains pages upon pages of complex legal rules and procedures that an Executor must follow during the probate. Also, there are certain deadlines that an Executor must meet in filing papers with the Court.

If an Executor violates any of these rules, they can be held personally liable for losses to the estate.

What Assets are Subject to Probate?

Assets owned solely in the name of the deceased person are subject to probate. Assets that pass by means of title, such as real estate titled as “Joint Tenants with Right of Survivorship,” or bank accounts titled as “Transfer On Death” are not subject to the probate process. Assets that pass by means of a beneficiary designation, such as life insurance or some retirement accounts, are also not subject to probate.

In some situations, however, assets that would otherwise pass by title or beneficiary designation can be subject to the probate process.

How is Distribution of the Estate Handled if there is no Will?

If there is no will or trust, the estate will be distributed according to California probate and intestate laws, which state that a person’s estate will be distributed in the following order:
1. Spouse
2. Children
3. Parents (if you have no children)
4. Siblings (if you have no children or parents)

Does Probate Avoid Estate Taxes?

No. Estate taxes, sometimes referred to as “the death tax” or “the inheritance tax,” need to be paid unless advanced tax planning has been done. The executor of the estate is responsible for making sure all estate taxes are paid. For 2009, estates valued at $3.5 million or less are not subject to estate tax. For 2010, there is currently no estate tax; for 2011, estates valued in excess of $1 are subject to estate tax.

Who is Responsible for Paying Estate Taxes?

Under the Internal Revenue Code, the estate tax is collected from the estate of the deceased. Depending on the terms of the will, the estate tax may be paid from the probate estate only, or also from a living trust, life insurance proceeds, and other assets passing directly to beneficiaries outside the probate estate.

If there is a Will, is there still a Probate?

Many people mistakenly think that by having a will they are avoiding probate. However, just the opposite is true. A will guarantees probate because the purpose of probate is to prove the validity of a will.

How big does your Estate have to be to Require Probate?

Estates that have a gross value of over $100,000 of personal property (cash, stocks, and tangible personal items) normally require probate. However, any estate that includes real property worth more than $20,000 requires probate. These values do not take into account any debts that are owed on the property. There are some ways to avoid probate, including beneficiary designations, jointly held assets, and community property.

Is there a Probate for Small Estates, Less than the Minimum Amounts?

California has a “Small Estate Summary Procedure” which allows a shorter and faster transfer of a decedent’s assets without the time and expense of a formal Probate proceeding. Typically, only estates less than $100,000 can utilize the Small Estate procedure.

What is a Probate Asset?

Assets held in the decedent’s name only are typically assets that will have to go through a probate. Assets that transfer by beneficiary-designation, such as life insurance, annuities, 401ks, and IRAs do not go through the probate, so long as the beneficiary is still alive. There are special provisions for a surviving spouse to avoid formal probate if the spouses held title as community property.

Does a Will Avoid Probate?

No. In fact, having a will guarantees there will be a probate. A will must be probated.

How does Jointly Owned Property fit into Probate?

Jointly owned property is also referred to as joint tenancy. Joint tenancy includes a “right of survivorship”, which means when one of the owners dies, the remaining owner automatically becomes the sole owner of the property. Probate is not required in this case. If by chance the death of both owners occur simultaneously, then probate is required.

How long does Probate take?

The length of time of a probate will depend on several factors. It usually takes a minimum of 12 months and can take up to two years or even longer for complex cases.

How much does Probate Cost?

Probate legal fees are set by state law (California Probate Code Section 10800) and are determined based on the size of the probate estate as follows:
• 4% of the first $100,000
• 3% of the next $100,000
• 2% of the next $800,000
• 1% of the next $9,000,000
• ½% of the next $15,000,000
• For all amounts above $25,000,000, a reasonable amount to be determined by the Court

The Personal Representative (i.e. Executor or Administrator) is also entitled to the statutory fee for their services.

The California Probate court can order additional fees for more complicated cases or extraordinary services. There are also court costs and filing fees, document certification and recording fees, and property appraisal fees.

What is the Value of the Estate?

A probate referee does a valuation of the estate to determine the date of death value of the real and personal property assets. The fair market value does not include mortgages or debts against the property. For example, a $500,000 home with a mortgage of $499,000 is still valued at $500,000 for purposes of the probate attorney and executor fees.

What Court Costs will there be?

In addition to the statutory fees for attorneys, there are costs for appraisal fees, publication costs, court filing fees, and miscellaneous fees charged by the county. A typical estate may incur $1,000 to $3,000 in court costs and other mandated fees.

Is Probate Public?

Yes, anyone can go to the courthouse and review your will and the entire court file. This court file becomes a public record when it is filed with the California Probate Court, including the value of the assets and estate inventory. This includes an itemized list of assets, liabilities, income and expenses of the estate, as well as the names and addresses of the estate beneficiaries.

Are there any Advantages to going through a California Probate?

There aren't many, but here are a few:

(1) California Probate proceedings are controlled by a judge, who can resolve disputes between heirs;
(2) There is a process for creditors to submit their claims, which must be made within a four-month period, provided they have received proper notice of the probate; if they do not file within the specified time-period, their claim is barred forever. After probate, the beneficiaries can have peace of mind knowing the assets they received are free from any future claims or actions.
(3) The probate executor is typically required to submit an accounting and report of their activities to ensure California probate duties are being carried out.
(4) In probate, all costs and fees are paid after death out of the estate before anything is transferred to the heirs.

Alternatives to Probate in California

In California, there are alternatives to the full, formal probate. Some of these are:

• If the surviving spouse or registered domestic partner is the sole heir to all or part of the decedent’s estate, they may file a special petition to avoid a formal probate. This method is faster and less expensive than a formal probate.
• If the total gross value of a deceased person’s personal property does not exceed $100,000, an affidavit procedure may be used on behalf of the beneficiaries to avoid a “full” probate.
• If the gross value of a decedent’s real property does not exceed $20,000, an affidavit procedure can be used on behalf of the beneficiaries to avoid a “full” probate.

Want to learn more about the California probate process?

See our Frequently Asked Questions for even more answers.

Request our “Executor and Trustee Protection Guide” here;

Request an individualized Case Review here or contact us at 949.260.1400.