EDUCATION

Probate Court Process

Probate is a required legal process that takes place after someone dies with probate property in California.

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“Probate” comes from the Latin term “probatum” which means “to prove.” The heirs of the estate must “prove” the validity of the will to the satisfaction of the Judge of Probate Division of the Superior Court, who will then allow the estate is to be distributed as proposed by the Executor or Administrator. Probate is almost always required to settle and distribute a deceased person’s estate when that person dies without a valid and properly funded Living Trust in California.

PROBATE IS NOT OPTIONAL.

Probate is avoided through the use of a properly funded Living Trust for all types of property.

If the deceased person dies with a valid will (known as “testate”) that will names a willing “Executor,” the named party will be first in line to control the administration of the probate process as the Executor.

If there was a will with no named Executor or there is no will (known as “intestate”) then an Administrator must be nominated to administer the probate estate. State “next of kin” intestacy law controls the hierarchy of who has a right to act if there is no named Executor.

Probate Administration Process

A probate administration is required to get the property from the deceased person’s estate to the heirs of the estate. The Executor or Administrator of the Estate must follow a litany of different legal formalities and are subject to personal liability for failing to properly perform their fiduciary duties. During the probate process, the Executor or Administrator must take control of and safeguard assets from theft and damage, and file tax returns, amongst many other requirements, for the deceased person, and for the estate.

After the will is submitted (if the decedent died testate), the Executor or Administrator files a petition for probate and other ancillary probate documents in the County where the decedent resided. Other “local” forms may be required (per County/case). Notice is given to heirs and creditors. The court issues “Letters” of Administration to the Executor/Administrator if the Petition is approved.
Once Letters are issued, the Executor/Administrator has the authority to administer the estate under the Independent Administration of Estates Act. The Executor will take control of the deceased party’s assets, pay off all debts, liquidate any assets to a new account opened under the estate, and distribute the estate based on the Will or Intestate law. The Executor will get an official Inventory and Appraisal from the Probate Court Referee.
Once all assets have been collected and all bills and taxes have been paid, the Executor asks for approval to distribute the “net” estate to the parties as provided in Petition for Final Distribution/Order. Upon approval, the Executor/Administrator requests a discharge from their duties and to close the case with the Court.

Why Probate is Bad

What Is So Bad About Probate?

It is Expensive.

Probate attorney and executor fees and court costs are expensive. Legal and Executor/Administrator fees and other costs must be paid before your assets can be fully distributed to your heirs.

Probate Fees (Attorney and Executor/Administrator) for a $1 million dollar gross estate would be, for example, $46,000.00. There are also court costs of roughly $5,000.00. This equates to costs of roughly $50,000 (or, 5% of the gross value of the estate).

It takes time.

The timeline varies. The best scenario and quickest it can be done under the legal timeline is 9 months. Many times, due to the facts of the case and availability of the court for required hearing(s), it takes much longer. A two year probate is not uncommon, and sometimes, it lasts even longer.

There Is No Privacy & A Greater Potential for Contests

Probate is a public process, so any “interested party” can see what you owned and who you owed. The process “invites” disgruntled heirs to contest and can expose your family to unscrupulous solicitors.

The Family Loses Control

The probate process determines how much it will cost, how long it will take, and what information is made public. And, if you died intestate, it sometimes also decides who will control the process, the parties that get your estate, what and how they get it.

Probate Assets

What Types of Assets are Subject to Probate?

The deceased person’s assets are separated into different categories that all require different treatment under the law. Assets that are probated include tangible goods, such as household goods and items, cars, and jewelry, to financial assets like bank accounts, stocks, and mutual funds, to business interests, real property interests, insurance policies and any other asset that the deceased person may have owned at death.

Real property
Personal Property
Stocks
Bonds
Mutual funds
Brokerage Accounts

How to Avoid Probate

How Can You Avoid Probate?

Taking steps to avoid probate must be taken before a person dies.

The best way to avoid probate is through creating a proper estate plan using a living trust, which means putting legal documents in place that avoid probate and determine how your assets and financial and medical affairs are managed during life and after death.

Other types of financial assets that avoid probate are:

Life Insurance*
Annuity*
401K plans*
IRAs*
Profit and Pension Plans*
Retirement Plans*
Joint Tenancy
Community Property Ownership with right of survivorship

*Provided that a beneficiary is named in the plan. Smart estate planning requires that you update your beneficiary designations just like you should ensure that Living Trust and other Estate Planning documents are up to date*.

Note (as of 1/1/23): For “Small Estates” — those with total gross value of all assets under $184,500 — probate can typically be avoided. Planning for “Small Estates” may only require a simple will in the proper circumstances.