Probate can be a confusing process for the families of those who have passed away. It becomes even more complicated if there are special issues or if the estate is large. It’s helpful to understand how probate works in California, how to choose an executor, and the fees associated with probate as well as how to avoid probate.
California Probate Law Explained
Family members are required to prove to the court that they are entitled to the estate of the deceased loved one based on a will or in the absence of a will. They will need to file the will along with the death certificate with the court to start the process of probate based on the state probate law.
California intestate laws require that approximately half of the estate is given to the spouse who survives. The other half of the estate will go to any children or other family. Any property that was joined jointly by the two spouses will go to the surviving spouse. All assets in the estate are tied up in probate until it’s completed, which can be about a year, longer if complications arise.
The law requires the estate executor to give notice to creditors and allow them time to come forward with evidence that they have a claim against the estate due to money owed by the decedent. State law also allows the executor and any estate attorney who has been hired to receive payment for their duties. The amount is based on the value of the estate.
Another stipulation of the law in California on probate is that the executor must administer the state, which involves taking inventory and determining the value of the estate as well as paying all debts, including the claims made by creditors. They may also need to file taxes before distributing the rest of the funds to the heirs.
Choosing an Estate Executor
The executor of an estate has an important and often time-consuming job. It can be complicated, especially if there are issues during the process. Choosing an executor is one of the most vital tasks. It’s often decided by the person who died and is included in the will. However, this isn’t always the case, and sometimes the person named may already be deceased or unable to handle the duties.
Much of the time, the executor will be a family member. They should understand financial matters and have enough time to take care of the tasks involved in handling the estate. If the family doesn’t want this task, it’s legal to hire someone else to do it. The law allows for an attorney to take on this role, but many will refuse to be the executor for their client because it is seen as a conflict of interest.
The only stipulations the law makes for the executor is they must be at least 18 years old and of sound mind. However, the person chosen should be someone the family or decedent knew for a long time if they family doesn’t take on this role. The court has the final say about who becomes executor, and it can reject an applicant with proper grounds.
How to Avoid Probate in California
With all the complexities that go into probate, many people wonder if there is any way they can avoid that process. The short answer is “yes,” but you must plan ahead.
For some, the size of the estate will determine that it doesn’t need to go through probate in California. For others, it depends on the type of property owned by the person who died or how the title was held to that property.
If no will exists, probate will be necessary to determine how the assets are to be distributed. If the estate is valued at less than $166,250, it may be possible to avoid probate as long as a will exists and isn’t contested or challenged.
Property that is held as joint tenancy or with the right of survivorship may avoid probate if no other issues exist. This is different than property that is titled as tenants-in-common, which doesn’t automatically transfer title to the second owner. If the title doesn’t list the type of ownership, it’s assumed to be owned equally as tenants-in-common. One of the ways to avoid probate is by titling the property as joint tenancy.
Another way property may be exempt from probate in California is by putting it in a revocable living trust. If the account is listed as pay-on-death, it will generally automatically go to the person listed and not be included in probate.
Does Every Will Go Through Probate in California?
Not every estate will need to go through probate. If the property is valued at less than $166,250, which is considered a small estate, with no real property, the estate may not even need to be filed in court. Generally, an attorney can help you provide the proper paperwork to present to a bank or other entity to have the assets released to the beneficiaries.
If the estate is still considered small and does include real property, it can still avoid full probate. It the estate is worth less than $55,425, the court process may not include a hearing. Estates valued between $55,425 and $166,250 may be settled with just one hearing. In both cases, there is no executor or administrator. Instead, all beneficiaries file the petition for the estate together in a single case.
An option for an estate with a surviving spouse is called a spousal proceeding. The spouse files this special proceeding to settle the estate without going through a full probate process. The value of the estate doesn’t matter in this case.
Do You Need a Probate Attorney in California?
The law in California doesn’t require you to hire an attorney for an estate in probate. Simple estates can often be settled without the assistance of an attorney. However, some situations may require legal advice and representation.
If claims are made against the estate and the beneficiaries or executor wants to contest them, they may need to hire an attorney. If there are other unresolved claims, legal advice may be beneficial. The same is true if a will isn’t clear or appears to be ambiguous. Another instance where an attorney may be important is in estates that have more debts to be paid than assets to pay them.
Statutory Probate Fees in California
Fees for probate attorneys are set by state law, which is based on a formula in the California Probate Code. The basic fees are as follows:
- 4 percent of the first $100,000 – this is the gross value of the estate before creditors are paid
- 3 percent of the second $100,000
- 2 percent of the following $800,000
- 1 percent for the next $9,000,000
- A reasonable amount as set by the court for all amounts over $25,000,000
For instance, say an estate in probate is valued at $2,500,000. The statutory fees would be collected as follows:
- 4 percent or $4000 for the first $100,000
- 3 percent or $3000 of the next $100,000
- 2 percent or $16,000 of the next $800,000
- 1 percent of what is left over or $15,000 in this case
The total fees would be $38,000 of the estate.
The California Probate Process for Larger Estates
Probate for a large estate in California will take around 8-12 months on average. This doesn’t include the time for dealing with contested wills or challenges against claims. The executor will need to file probate with the court in the county where the person who died had been living. The court will set a hearing date, which will be the time when the executor or representative of the estate is selected.
The court will give letters to the representative at the hearing which shows they have the authority to act on behalf of the estate. This enables them to take specific actions, such as paying off debts.
The administrator or executor will give notice to creditors and others and take inventory of the assets for the estate. An appraisal will be made to determine value. Once all claims are in, the administrator will pay the debts. They are also responsible for filing any taxes and paying what is due out of the estate.
After all this is done, the administrator will distribute what is left to the heirs as stipulated in the will or by state law. As the last step, they will submit a Petition for Final Distribution to the court to be approved, so that probate can be closed.
It is often best to work with an attorney in large estates, especially if numerous assets are involved. This information will give you an idea of what to expect during this process. You can also contact an estate attorney for more specific answers based on your unique situation. You want to do as much as possible to avoid delays and get through the process in a timely manner.