California ProbateWhat’s the Purpose?

Probate.  You’ve heard the word, but what is it?  Here is a brief overview to let you know what triggers the probate process and what is involved to complete the journey.  In general, probate is the court supervised collection of assets, payment of debts and expenses with the net amount being distributed to the beneficiaries.  The actual paperwork for submission to the court for its supervision is done by the personal representative of the estate and their attorney and the fees charged by the attorneys and personal representatives are set by statute.

Who Needs Probate?

Not everyone will need to take their loved one’s estate through probate.  As I will discuss in another post, if the value of the assets in the estate is less than $150,000, there are simplified procedures that will allow you to avoid having to file a petition in probate.  If these procedures allow you to gain control over the deceased assets, there will be no need to go through a full blown probate.

If these procedures do not work and you are being told by banks, brokerage firms or title companies, for example, that you need a court order or “Letters Testamentary” to manage property, you are looking at a filing a petition in probate.

What is the Procedure?

Probate procedure can be surprisingly complex and will vary from county to county.  This will be a thumbnail sketch to give you a rough idea of what to expect.

The first question is to determine whether a probate proceeding is really necessary. The answer will be no if all of the decedent’s assets are in a living trust or are owned in joint tenancy. If the deceased person has more than $150,000 of assets, there is no surviving spouse or the assets were not left to the spouse, or if an institution will not release control of property without Letters Testamentary, the answer is yes, a probate proceeding is very likely necessary.

If it is necessary to file a probate petition, the next question is, who will act on the decedent’s behalf? If the decedent left a will, they probably named someone in the will to act as the executor of their estate.  If the will did not appoint an executor, or if the named executor chooses not to accept the nomination, or if the deceased died without a will, an interested party can petition the court to be named administrator of the estate. The executor or administrator does not have to be a California or United States citizen or resident.

After appointment of the executor, the court will issue Letters Testamentary granting the executor the power to act on behalf of the estate.  The executor will be charged with taking control of the deceased’s assets and producing an inventory and appraisal.  The court will further supervise any creditor claims for debts owed at the time of death. There is a fixed period of time for creditors to come forward to demand payment.  It is important that the executor take prompt action notify known creditors to start that clock.

Along with the payment of debts, the executor must see that taxes are paid. Income taxes must be paid for the personal income up to the date of death.  Income collected during probate requires the filing of a separate estate income tax return on behalf of the estate.  In 2013, a federal estate tax return is required if the decedent owned over $5.25 million of assets as of the date of death.

After the executor collects all of the assets of the decedent and taxes and debts are paid, the executor will then request court approval to distribute the remaining assets in accordance with the terms of the decedent’s will or the rules of intestate succession, if the decedent died without a will.

Cost and Time

As you can see, the probate process has the potential to take a great deal of time.  Notice has to be given far and wide so creditors have at least four months to file a claim against the estate.  In my experience, the fastest one can get through a probate proceeding start to finish is six months, and that is really pushing it.  The average time to take an estate through probate is eighteen months. In the event there is any type of dispute or will contest, the matter can drag on for years.  I’ve discussed the costs involved with a standard probate proceeding in detail here.

You have many options to avoid probate, such as lifetime giving, revocable (living) trusts and irrevocable trusts.  If you need to take an estate through probate, please contact us as we are very experienced probate attorneys. We are available to discuss your options at 415-781-4000.