Probate

CALIFORNIA PROBATE

WHAT IS PROBATE? Probate is a legal proceeding that is used to wind up a person's legal and financial affairs after death. In California probate proceedings are conducted in the Superior Court for the county where the decedent lived, and can take at least six months and sometimes as long as several years.

WHAT HAPPENS DURING A PROBATE? The person who is nominated in the will as executor files a petition asking that he or she be appointed as executor. If there is no will, the Probate Code provides a list of persons who have priority to petition to become executor. The will also is filed with the petition, and notices are sent to the heirs and/or relatives to let them know when the hearing will be held. If there are objections to the petition, or if the validity of the will is contested, the hearing will be used to resolve any problems that have arisen. In some cases this may mean that the validity of the will is not upheld, or that some other person than the original petitioner is chosen to administer the estate. In most cases, however, there is no objection and the petition is granted. The executor then makes an inventory of the estate's assets, locates creditors, pays bills, files tax returns, and manages the estate assets. When all of the duties of the executor are completed, another petition is filed with the court asking that the estate be distributed to the heirs. If this petition is granted, the estate administrated is completed by distributing the assets to the heirs and filing final tax returns.

HOW MUCH DOES PROBATE COST? California Probate Code section 10810 sets the maximum statutory fees that attorneys can charge for a probate. Higher fees can be ordered by a court for more complicated cases. The fees are four percent of the first $100,000 of the estate, three percent of the next $100,000, two percent of the next $800,000, one percent of the next $9,000,000, and one-half percent of the next $15,000,000. For estates larger than $25,000,000, the court will determine the fee for the amount that is greater than $25,000,000.

The fees listed below are the California statutory fees used to compensate attorneys and executors in probate cases for various sizes of estates. If both the attorney and the executor receive a fee, the amount paid will be double that shown.

Estate Value - $100,000; Statutory Fee = $4,000 times 2 = $8,000

Estate Value - $200,000; Statutory Fee = $7,000 times 2 = $14,000

Estate Value - $300,000; Statutory Fee = $9,000 times 2 = $18,000

Estate Value - $400,000; Statutory Fee = $11,000 times 2 = $22,000

Estate Value - $500,000; Statutory Fee = $13,000 times 2 = $26,000

Estate Value $600,000; Statutory Fee = $15,000 times 2 = $30,000, and so on.

In addition to the fees shown above, the filing fees charged by the Superior Court vary, depending on the size of the estate.

APPRAISAL OF THE ESTATE: Estates are appraised by probate referees, who determine the fair market value of the asset. The fair market value includes mortgages and other debts, which can result in an appraisal of the property that is higher than the equity that the deceased owned in the property. Probate referees are appointed by the state controller's office and they receive a fee based on .1 percent of the assets that have been appraised.

FEES CAN GO HIGHER: In probates that are complicated by lawsuits or tax problems, the attorney and executor can ask the judge to approve fees that are higher than those set by state law.

COURT COSTS: In addition to the statutory fees, there are costs for appraisal fees, publication costs, and miscellaneous fees charged by the county. A typical estate might incur $1,000 to $2,000 in court costs and other mandated fees.

ADVANTAGES OF PROBATE: The proceedings are controlled by a judge, who can decide disputes between heirs or between the heirs and the executor. Creditors are required to submit their claims against the estate within a four-month period, provided they have been notified of the probate. The executor is required, in most cases, to prepare an accounting and report of the executor's activities.

DISADVANTAGES OF PROBATE: The cost is usually MUCH higher than would be required for the administration of a living trust for an estate valued at the same amount. It usually takes months, or even years, longer to probate an estate than to administer a trust. Most estates don't need the supervision of the court unless disputes occur.

AVOIDING PROBATE: For most families and individuals, the best way to avoid probate is to establish a comprehensive and funded living trust with supporting documents.

For assistance with establishing a Living Trust, or for assistance with a probate, please contact our office at (714) 252-9446.