When a loved one passes away without a fully-funded living trust, his or her estate often goes through a court-managed process called probate or estate administration where the assets of the deceased are managed and distributed. If your loved-one owned his or her assets through a well drafted and properly funded living trust, it is likely that no court-managed administration is necessary, though the successor trustee needs to administer the distribution of the deceased’s assets. The length of time needed to complete the probate of an estate depends on the size and complexity of the estate and the local rules and schedule of the probate court.
Every probate estate is unique, but most involve the following steps:
- Filing of a petition with the proper probate court.
- Notice to beneficiaries under the Will or to heirs at law (if no Will exists).
- Petition to appoint Executor (in the case of a Will) or Administrator for the estate.
- Inventory of estate assets by Executor/Administrator (valued by a California Probate Referee).
- Appraisal of estate assets by Probate Referee.
- Payment of estate debts to rightful creditors.
- Sale or transfer of estate assets.
- Payment of federal estate and income taxes, if applicable.
- Final distribution of assets.
FREQUENTLY ASKED QUESTIONS
What happens if someone objects to the Will?
An objection to a Will, also known as a “Will contest” is a not uncommon occurrence during the probate proceedings and can be incredibly costly to litigate.
In order to contest a Will, one must have legal “standing” to raise objections. This usually occurs when, for example, children would otherwise receive disproportionate shares under the Will, or when distribution schemes substantially change from a prior Will to a later Will. In addition to disputes over the tangible distributions, Will contests can be a quarrel over the person designated to serve as Executor. Usually the contestant alleges that the testator lacked testamentary capacity or was subject to undue influence when the purported Will was executed.
Does probate administer all property of the deceased?
Probate is primarily a process through which title is transferred from the name of the decendent to the names of the beneficiaries under the will or heirs at law (if no will).
Certain types of assets need not go through probate. These include:
- Property in which you own title as “joint tenants with right of survivorship”. Such property passes to the co-owners by operation of law and need not go through probate.
- Retirement accounts such as IRA and 401(k) accounts where there are designated beneficiaries who have survived the decedent..
- Life insurance policies with designated beneficiaries who have survived the decedent.
- Bank accounts with “payable on death” (POD) designations or “in trust for” designations.
- Property owned in a living trust. Legal title to such property passes to successor trustees without having to go through probate.
Do I get paid for serving as an Executor?
Executors are reimbursed for all legitimate out-of-pocket expenses incurred in the process of management and distribution of the deceased estate as approved by the Court. In addition, Executors are generally entitled to statutory fees, which vary by state law and on the size of the probate estate assets. The Executor must fulfill his or her fiduciary duties owed to the estate heirs and/or beneficiaries with the highest degree of integrity and can be held liable for any mismanagement of estate assets in his or her care. It is strongly advised that the Executor retain an experienced attorney and an accountant to advise and assist him with his or her various duties.
How much does probate cost? How long does it take?
The cost and duration of probate can vary substantially depending on a number of factors such as the value and complexity of the estate, the existence of a Will and the location of real property owned by the estate. Will contests or disputes with alleged creditors over the debts of the estate can also add significant cost and delay. Common expenses of an estate include executors fees, attorneys fees, accounting fees, court fees, appraisal costs, and surety bonds. These typically add up to 2% to 7% of the total estate value. Most estates are settled though probate in about 9 to 12 months, assuming there are no complicating factors. In California the typical costs are outlined in an “Estimated Probate Cost Savings” chart found by going to the “Library” tab on the toolbar at the top of the site and then click on “Charts.”
Please contact one of our offices to request a free consultation and receive more information.