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WHAT IS PROBATE?
Probate is the legal process through which the
court makes sure that, when you die, your debts
are paid and your property is distributed
according to your will. If you do not have a
will, the state in which you live has written
one for you. Probate can also take control if
you become physically or mentally incapacitated.
Depending on how title is held to your assets,
if your gross (not net) estate is over
$100,000.00 it is subject to probate.
If you execute a revocable living trust (one
that holds title to your assets) you may avoid
the probate process altogether.
EVERY CALIFORNIA RESIDENT HAS A PLAN...
THIS PLAN IS EITHER:
YOUR CHOICE
OR
ONE GIVEN TO YOU BY THE STATE OF
CALIFORNIA
CALIFORNIA’S CHOICE:
Without a proper estate plan, the State of
California has a process to dispose of your
assets. This process may take years to complete
(average time is 1-2 years) and your family will
experience loss of privacy and control and pay
expensive administration costs (4-10% of gross
estate). Unless you choose to plan, the State of
California has already chosen a plan for you.
This plan is called
PROBATE.
YOUR CHOICE: NO
PROBATE. Estate planning with a revocable
living trust allows individual choice and
control over legal and financial decisions
today, tomorrow and in the future. Estate
planning is relatively inexpensive. The process
is private and not mandated by the court. During
life, you may change the plan to reflect your
changing needs. After death your wishes may be
carried out in a timely fashion. Most
importantly, estate planning includes provisions
for any unexpected disability - it is not just
applicable upon death.
WHY SHOULD I CHOOSE?
A proper estate plan costs only a fraction of
the court imposed probate fees listed below!
If you properly plan your estate,
at death
your estate will NOT be subject to
Probate, the
MANDATORY court proceeding in
which the state insures that your debts are paid
and your legal and financial matters are
finalized.
WHY IS PROBATE SO BAD?
TIME CONSUMING: If your estate is
between $100,000 and $1,000,000, it takes
between 1-2 years, on average, to complete the
probate process. For estates over $1,000,000,
this process could take three years or more to
complete.
HIGH COSTS: The following chart
demonstrates the
Probate Fee amounts based on the
value of the estate:
Gross Asset Value of Entire Estate
(Includes any mortgage value) |
Minimum Probate Fees without Proper Estate
Planning ** |
Probate Fees with Proper Estate Planning |
|
$100,000 |
$8,000 |
$0 |
|
$300,000 |
$18,000 |
$0 |
|
$500,000 |
$26,000 |
$0 |
|
$700,000 |
$34,000 |
$0 |
|
$900,000 |
$42,000 |
$0 |
|
$2,000,000 |
$66,000 |
$0 |
|
$4,000,000 |
$106,000 |
$0 |
|
$5,000,000 |
$126,000 |
$0 |
PROBATE ADMINISTRATION
Must an Attorney Be Used for the Probate
Process?
No, it is not required. However,
using an attorney is recommended, especially if
the estate involves any degree of complexity. A
good lawyer experienced in the Probate Process
will help you meet deadlines and avoid mistakes,
pitfalls and delays.
What is Probate Administration?
A Probate Administration takes
place when someone passes away leaving no estate
plans or leaving a Will only. There are
typically five main stages to a Probate
Proceeding (stages do not include statutory
deadlines and individual circumstances will
vary)
Stage 1:
The personal representative
(executor or administrator) or her/his attorney
prepares and files a Petition for Probate.
Stage 2:
The probate lawyer (or the personal
representative, if she/he is unrepresented),
sends notice by mail of the death and probate
hearing to everyone named in the decedent’s
will, where one exists. All legal heirs of the
decedent must be noticed as well. This notice
must also be published in the newspaper so
creditors are aware of the hearing. Notice
gives everyone involved a chance to object to
either the appointment of a certain executor,
the admittance of a particular will or both.
Stage 3:
The hearing will usually occur several weeks
after the filing of the matter. Its purpose is
to make a judgment as to whether the will is
valid, as well as to appoint the personal
representative. In some instances, those who
witnessed the will are asked by the court to
sign a declaration to that effect. In the
absence of objections, the court approves the
petition and appoints the personal
representative.
Stage 4:
It is the duty of the personal representative to
identify, take control of, and administer the
probate assets until all debts are satisfied and
income tax returns are filed. Generally, it
takes a year or more to discharge this
responsibility. In some cases, depending upon
the terms of the will (assuming there is one),
the personal representative may sell estate
property to satisfy them.
Stage 5:
Once debts and taxes are paid, a report is filed
with the court by the personal representative.
All income received and every payment made on
behalf of the estate must be accounted for in
detail. The judge will then authorize the
division of the remaining property among those
mentioned in the will, and the personal
representative will ensure that such division is
completed as ordered.
What About Living Trusts? Must They Go Through
Probate?
No. Any property where title is
held by a living trust goes directly to the
beneficiaries, once the trustee completes
her/his trust administration responsibilities.
Please consult an attorney to
ensure compliance with the Probate Process and
avoid costly mistakes.
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