What is probate?

Probate is the process when the court supervises the administration of a decedent's estate, and culminates in an order for the transfer of legal title of property from the estate of the decedent to his or her beneficiaries. The process requires the filing of a Petition for Probate and appearances in court. During probate, all known and unknown creditors must be notified of the death and given an invitation and opportunity to file claims against the estate. The Law Offices of Michael K. Elson has the experience and skill to efficiently handle all aspects of your probate case while providing regular updates and keeping you well informed as to the status of your case.

When is probate necessary?

When a person who owns assets dies without a living trust, then probate is usually necessary. Having just a Will does not avoid probate. Even if a deceased person did not own any property, sometimes the deceased person’s survivors may decide to open a probate if there are debts owed to the decedent's estate or if there is a need to set a deadline for creditors to file claims. When there is property to transfer, the probate process also provides for the distribution of the estate's property to the decedent's heirs. In general, if the decedent owns any real estate, or owns financial assets exceeding the 2022 probate threshold of $184,500, then probate is required.

What is the cost of probate?

The cost of probate is set by California State Law. The total costs may include appraisal costs, executor's fees, court filing fees, a surety bond which may be waived under certain circumstances, probate referee fees, plus statutory attorney fees and accounting costs. On average the total probate costs roughly 5% to 6% of the total estate value when you include publication costs and the cost for the bond, however in some cases total costs can exceed 10%. If there is a will and it is contested, probate litigation could cost many more thousands of dollars. On the other hand, property you transfer into a living trust avoids probate and will save your heirs thousands of dollars.

How long does probate take?

Average time for simple probate is about one year. Some probate cases take several years to resolve, while others can be completed within six months. The average probate drags on for many months or even years before the inheritors get anything. And by that time, there's less for them to get: in many cases, about 5-10% of the property has been eaten up by lawyer fees, court fees, and other probate costs during the process.

What is the location of the probate court?

In California, probate hearings are in the County where the decedent lived at the time of his or her death. This office can handle probate cases in all Counties of California. If there is real property in another state besides California, you will have to file a probate petition in the other state as well. A will becomes a matter of public record when it is submitted to a probate court, as do all the other documents associated with probate, inculding inventories of the deceased person's assets and debts.

Do life insurance proceeds or retirement benefits need to go through probate?

No, because benefits are usually paid directly to the named beneficiaries. Also, money from IRAs and 401(k) accounts transfer automatically to the persons named as beneficiaries. Bank accounts set up as pay on death accounts (POD) or "in trust for" accounts ("Totten Trust”) with a named beneficiary also transfer without probate.

What if the decedent owned property outside of California?

There will be probate action filed in each state where there is real property. Each state has its own method for the distribution of a decedent’s real property. If there is a will, the will is first admitted to probate in the home state, and then the will must submitted to an ancillary probate in any other state in which the decedent owned real property.

Who is in charge of the probate process?

The person named as executor in the will is typically appointed as the personal representative, in which case they are responsible for managing the estate and following probate rules and procedures. The executor has no legal authority to act as personal representative until they are appointed by the court and formal Letters are issued.

If there is no will, or no executor named in the will, or the person named as executor in the Will is unable or unwilling to be executor, the probate court appoints an administrator to handle the process. The Court usually appoints a relative or a beneficiary.

In order to sell real estate or assets owned by the estate, the Court requires the personal representative to first obtain Court permission. The personal representative must obtain the Court’s permission to pay fees to himself or herself, pay fees to his or her attorney, make a preliminary distribution of property to beneficiaries (with a few exceptions), or close the estate.

What does the Personal Representative do during the Probate process?

They must locate the decedent's assets and manage them during the probate process, receive payments due to the estate, including interest, dividends, and other income such as unpaid salary, vacation pay, etc., set up an estate checking account to hold money that is owed to the decedent, determine who is going to receive assets under the will, or if there is no will, the California Probate Code specifies who receives inheritance under the laws of intestate succession. Other tasks are to value or appraise the estate's assets, give notice to creditors and potential creditors of the probate proceeding including deadlines for creditors to file claims, determine the validity of any and all claims against the estate, pay funeral bills, outstanding debts, and claims determined to be legally valid, use estate funds to pay continuing expenses such as mortgage payments, insurance premiums, and utilities, then eventually arranging the disconnection of utilities, terminating leases, closing credit cards, and notifying the decedent’s bank, the Social Security Administration, and the post office, file tax returns and pay income and estate taxes, including a final federal and state income tax return. Final tasks include the distribution of decedent's property to the proper beneficiaries, and filing receipts for distribution.

Do executors get paid?

Usually, out of pocket expenses to settle the estate are reimbursed and statutory fees of about 3% of the gross estate may be paid to the executor. If the executor is the sole beneficiary, then usually fees are waived.

How are estate and income taxes handled in probate?

Federally, a Form 1040 Federal Income Tax return must be filed for the decedent’s final year of life. A Form 1041 Federal Fiduciary Income Tax return for the estate must be filed as well. In addition, a Form 706 Federal Estate Tax return, and possibly even a Form 709 Gift Tax return may need to be filed.

For state taxes, the executor must file the necessary state income tax return, state fiduciary income tax return during the probate period, and estate tax and gift tax returns if applicable. Real estate property taxes, personal property taxes, business taxes, must be paid as well. Any unpaid taxes or unfilled tax returns for previous years must also be accounted for.

Who is responsible for paying the rest of my deceased spouse’s debts?

If you and your spouse shared the same bank account and credit cards, then you may have to pay the bills or debt of your spouse. However, if the credit card or account was opened solely under your spouse, then you may not be liable.

What are the basic steps in the process to probate a decedent's estate?

Step 1: In most cases, the person requesting appointment as personal representative (executor or administrator) hires a probate lawyer to prepare and file a Petition for Probate.

Step 2: The probate lawyer arranges to mail notice to everyone named in the decedent’s Will and/or all their legal heirs about the death and the probate hearing. The notice must be published a newspaper where the decedent lived to give creditors notice about the hearing. Notice gives creditors, claimants, and potential heirs, an opportunity to object to the will and to the appointment of the personal representative.

Step 3: The court hearing usually takes place four to six weeks after the Petition for Probate is filed. The purpose of the hearing is to determine the validity of the will and to appoint the personal representative.

Step 4: The personal representative must identify, take possession of, and manage the probate assets until all debts have been paid and tax returns filed. This process usually takes about a year. Depending on the terms of the will, if any, and on the amount of the decedent's debts, the personal representative may have to sell real estate, stocks, or other assets. For example, if there are unpaid debts, or if the will makes cash gifts, but the estate consists mostly of real estate or jewelry, there will need to be an appraisal and sale to produce the necessary cash.

Step 5: After paying all legally enforceable debts and taxes, the personal representative must file a report with the court. This report accounts for all income received and paid on behalf of the estate. The Court will then authorize the personal representative to actually distribute the remaining property among the beneficiaries.

Note, the description of steps above have been simplified for illustration purposes to provide a general outline of the probate process. This law firm can assist with probate in all Counties of California, but handles probates most extensively in Los Angeles County and other adjacent Counties such as Ventura, San Bernardino, Kern, Orange, Riverside, San Diego, Santa Barbara, and even bay area Counties such as Alameda.