Decedent's Probate

Probate is the legal process by which a court oversees the distribution of a decedent's property. If the decedent does not have a valid Will, the court will apply the state law of Intestate Succession in determining who will receive the decedent's assets. If the decedent has a valid Will, the court will supervise the settlement of the decedent's assets pursuant the instructions in the decedent's Will.

Living Probate

The Probate Court has jurisdiction over individuals who lack legal capacity (e.g.., unconscious or senile) as well as unsupervised minor children. For such individuals, the Probate Court will appoint a personal or instructional Custodian and the individual will become a Ward of the State under the supervision of the Probate Court.

PROBATE PROCESS

• File the decedent's Will
• Prove the validity of the Will
• Identify and inventory the decedent's property
• Appraise the value of the decedent's property
• Pay off legal debts, including death taxes
• Wait 120 days for creditor claims
• Provide a final accounting
• Have the final accounting approved at a Probate Court Hearing
• Distribute remaining assets pursuant to the Will or Intestate Succession

DISADVANTAGES OF PROBATE

• Probate proceedings are a matter of public record
• Probate costs range from 3% to 10% of the GROSS value of the estate, not the net value of the estate.  
• Probate can prolong settlement of an estate indefinitely
• Children can be assigned to foster homes
• Court may liquidate family or business assets to divide them between heirs or pay the decedent's liabilities
• Heirs will be prevented from inheriting property on a timely basis

PROBATE DELAYS

The Probate Process can be exasperating. Although the time required to navigate through the Probate Process varies with each estate, it is very difficult to close even a simple Probate Estate in less than a year. In practice, uncontested Probate estates are seldom closed in less than 18 months. Contested estates, of course, usually take longer to administer. The delays of the Probate Process can prevent residuary beneficiaries from receiving your gifts for months or years, and often from even knowing the amount of their gifts. Probate delays are especially irritating to surviving spouses and other beneficiaries who need the intended devise for important personal, family or business reasons. Particularly in the case of the death of a surviving parent, Probate delays often cause distrust and jealousies among the beneficiaries of the estate. It should be noted that California does provide for accelerated administration. However, accelerated administration provisions apply only to small estates.

COST OF PROBATE

The total estimated average Probate costs in California, as determined from various sources, are shown in the following chart. The cost of probate includes court costs, appraisal expenses, fiduciary fees, and attorney fees. The following estimation does not include taxes.

AVOIDING PROBATE

In structuring your estate, you should consider avoiding the unnecessary cost and inconvenience of the Probate Process. There are several practical methods to accomplishing this goal; e.g., Joint Tenancy, Contract, and Trusts.

Joint Tenancy. Property held in Joint Tenancy with Right of Survivorship succeeds by "operation-of-law" to the surviving joint tenant. The principal advantages of Joint Tenancy as an Estate Planning device are that it is easily implemented for most types of property (e.g., real estate, stock, personal property and bank accounts) and it avoids probate (at least until the death of the surviving joint tenant).

Contract. Property that passes by contract to a designated beneficiary (such as life insurance policies and employee benefits programs) are transferred via the terms of the contract and generally not subject to the Probate Process (unless the decedent is the named beneficiary in the contract).

Trusts. A Trust is one of the most effective and flexible methods of avoiding Probate. Because property held in Trust is legally owned by the Trustee, it is no longer a part of the Probate Estate. Thus property held in trust is not subject to the Probate Process.