The term “probate” – which literally means “proving” – refers to the process wherein a decedent’s will must be authenticated, outstanding legitimate debts paid, and assets transferred to the beneficiaries. Probate is a judicial proceeding by which the court decides the rightful heirs and distribution of assets of a deceased.
One of the biggest misconceptions we hear from people is that they have a will so their estate wouldn’t have to go through probate. This is NOT TRUE. If there are assets in the deceased’s name at their passing, it doesn’t matter if there is a will or no will, the estate still needs to go through probate. Smaller estates with a value of $184,500 or less may qualify for a non-formal probate case.
Going through probate can be both more time-consuming and expensive without a will than it is with a will. This is because your will can waive certain probate requirements (like having the executor post a bond or obtain judicial approval to have an estate sale). At the same time, probate without a will follows the governing state’s intestacy laws which may likely result in a less-than-perfect split of assets that not only may not be in line with your wishes but may leave many surviving loved ones unhappy. That’s where our Ventura probate lawyer comes in.
Why You Want to Avoid Probate
- Probate is very expensive.
Money that would be going to the beneficiaries is being spent out of the probate estate on costs, attorney’s fees, and personal representative fees.
- Probate can take a long time.
Probate proceedings can take anywhere from 12 months to 24 months to complete. This could be for an uncontested probate (no one is fighting or challenging it). Some probate cases where the family is in disagreement can drag on that could take 5 to 7 years (which means a lot of money on attorney’s fees). Additionally, while the estate is going through probate, the probate estate (money) is not available to the family until it is completed.
- Probate is a public proceeding.
Once the petition is filed with the court, anyone can go to the courthouse, pull the records and find out what was owned, who money is owed to (creditors) and who the beneficiaries are. This could open the beneficiaries up to predators.
Read our blog for more information on how to avoid probate in California.
Minor Children and Probate
If someone passes away and they have minor children with no planning in place, state law will decide who gets what and when.
- For example, the intestate statute may mandate divvying up proceeds equally among your children.
- Your older children will get their shares immediately if they’ve attained adulthood (18 years old in California).
- The court will appoint a guardian of its choosing to manage the money for your minor children until they become adults and possibly a separate guardian to raise your minor children.
- A guardian can charge a lot of money to manage the money for your minor children and be a total stranger – as can the guardian who raises your minor children.
- If you die without a valid will, the court, not you, will decide the futures of your minor children.
This is why it is so important for parents that have minor children to get a plan in place to protect their kids. Without legal estate planning documents in place, parents have no say what happens to their minor kids if something happens to them.
Costs of Probate
In California, if an estate must go through probate court, the fees have to be paid to both the attorney and personal representative (also known as executor or administrator). These fees are set by state statute and are for the total value of the estate.
California Probate Code §10810 states that probate fees are 4% of the first $100,000 of the estate, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9,000,000, and one-half % of the next $15,000,000. For an estate above $25,000,000, the court will determine a reasonable amount for the fees. If the probate matter is complicated or special circumstances arise, higher fees can be ordered by the court.
Costs for probate court also include a probate petition filing fee of $435 and $435 at the closing of the probate to file the petition for final distribution of the estate assets. There can also be other miscellaneous costs including probate referee fees, bonds, publication of probate notice, and other costs.
Calculate Probate Fees Here
Probate can be avoided with the proper planning by creating a trust. Property in a revocable living trust does not pass through probate. Property that passes using a will only guarantees probate.
As everyone’s situation is different, it’s important to analyze every aspect of your situation – and what the future may hold – so that you can determine what’s right for you and whether probate avoidance, incapacity planning, and asset protection have value to you and those you love. Most people receive the greatest overall benefit from having a trust.
Without an estate plan in place, you and your family are left completely unprotected. Call our office at (805) 307-5019, click below to schedule an appointment with one of our estate planning attorneys, or complete the form below, and we’ll help you determine whether a will or a trust makes sense for your situation. You don’t have to make these decisions alone.