Probate is not a tax but a procedure to validate a will, inventory the estate, ensure the will’s instructions are followed and provide an opportunity for creditors to be repaid before the estate is distributed to beneficiaries. If there is no will, the state will provide one for you.

When Does Probate Occur?

If the decedent’s property is going to a surviving spouse, a “spousal property petition” can be filed at a summary probate proceeding to confirm the surviving spouse owns the property. For estates under $100,000 in probatable assets, the personal representative/executor can often prepare affidavits which are used at banks and other financial institutions to release the funds for repayment of debts and distribution.

Estates over $100,000 in probatable assets are subject to a formal probate. Assets with beneficiaries are not figured into the probatable state. These assets include IRAs, 401(k)’s, annuities, life insurance and bank accounts with payable on death, etc. Assets in a living trust also avoid probate.

If the estate is under $100,000 it may still be wise to consult an attorney about which type of probate would be best.

Which Assets Are Subject To Probate?

Assets that avoid probate include (but not limited to)

1. Assets listing a beneficiary(s), such as IRA’s, 401(k)’s, life insurance, annuities and bank accounts
2. Assets held in joint tenancy if the other party is still living
3. Assets in a living trust

Probate assets(but not limited to)

1. Real property greater than $30,000 (the gross value, not net value)
2. Bank accounts and other financial accounts without beneficiaries
3. Personal property

The Probate Process

This list does not cover many of the tasks undertaken by the personal representative but provides a general idea of the steps and tasks. Once again, we recommend consulting an attorney if you have questions.

1. The will’s listed personal representative files both the will and a petition with the Supreme Court asking to be appointed as executor.
2. A Notice of Petition to Administer Estate must be published
3. Notices of Petition to Administer Estate are sent to beneficiares and relatives regarding the upcoming hearing to resolve any questions or contests
4. Inventory the estate
5. Pay bills and creditors
6. File tax returns
7. Petition the court to distribute remaining assets to the heirs
8. Final tax returns filed

Length Of Probate in California

The initial time to file papers and set a hearing date is about forty-five days. Creditors must be given four months minimum to make claims against the estate. In the end, it is not uncommon for probate to last eight months to a year depending on the size and complexity of the estate.

Probate Costs in California

Filing fees are often around $350-$500.
Running legal notices will cost $100-$200.
Appraisals can be 1% of the value of the estate.

The state of California has maximum fees that can be charge by attorneys and personal representatives. The list below shows the maximum each could charge:

• 4% of the first $100,000
• 3% of the second $100,000
• 2% of the next $800,000
• 1% of the next $9,000,000
• 0.5% of the next $15,000,000

If the probate is more complicated, the court can award higher fees.

Probate Benefits

Probate is not necessarily a bad thing for an estate. It has its benefits which include:

1. Probate offers oversight of the transition of your estate if you worry about your personal representative adhering to your instructions and legal obligations.
2. A judge is available to settle disputes.
3. Creditors also have a limited window to make claims against the estate. If creditors miss this window they are out of luck in the future.
4. Assets transferred via probate almost always receive a step up in cost basis, as opposed to assets gifted before the decedent’s passing or through joint tenancy.

Consult with an attorney whether probate is best for your estate or if creating a living trust and/or other steps to avoid probate is best suited for your needs and goals.