Estate Planning

Why use a living trust-based estate plan? The probate process in California is not only burdensome for family members and beneficiaries, but is also considerably more expensive than the cost of establishing a trust-based plan.  California`s probate system is one of the most complicated in the U.S., and also provides for some of the highest fees.  Establishing and properly funding a revocable living trust during your lifetime should avoid the probate process entirely. A living trust enables you, during your lifetime, to plan for and control the smooth disposition of your assets following your death.

PROBATE IN CALIFORNIA

Review the information below for answers to the following questions:

When are estates subject to the probate?

What types of fees are associated with probate?

How long does the probate process take?

Are My Trust, Fiduciary and Custody Assets Safe?

What is Intestacy?

When are estates subject to the probate?

Property with an aggregate value in excess of $100,000 which passes by will or intestate succession is subject to probate administration, a process by which the court determines the validity of a will and who is entitled to receive distributions of the decedent`s property either under the will or according to the laws of intestacy. (Property held in joint tenancy or which will pass by contractual arrangement will not be subject to probate administration.)

The proceedings of the probate court are a public record and anyone can have access to information about the nature and size of a decedent`s estate as well as the identities of any beneficiaries. Additionally, at the beginning of the probate process all heirs (i.e., those individuals who would receive property by intestate succession) and beneficiaries under a will must be notified of the probate proceedings and may contest the provisions of a will.

What types of fees are associated with probate?

Unless compensation has been otherwise provided for in a will, attorneys and executors who administer the estate in probate are entitled to fees according to a statutory schedule. In addition to the statutory fees, attorneys and executors are entitled to "extraordinary" fees for services such as selling real property and preparing tax returns. The statutory fee which attorneys and executors are each entitled to is a percentage of the appraised value of the estate assets without regard to encumbrances:

• 4% of the first $100,000;
• 3% of the next $100,000; 
• 2% of the next $800,000; 
• 1% of the next $9,000,000;
• .5% of the next $15,000,000;
• over $25 million "a reasonable amount to be determined by the court".

The following chart shows some of the statutory fee calculations:

           Gross Value of Estate                       Fees due both Attorney
                                                                       and Executor, each

             $100,000                                              $3,150

             $300,000                                              $7,150

             $500,000                                              $11,150

             $700,000                                              $15,150

             $900,000                                              $19,150

             $1,000,000                                           $21,150

             $2,000,000                                           $31,150
 
             $4,000,000                                           $51,150

How long does the probate process take?

From the time probate proceedings are initiated to the final distribution of estate assets to beneficiaries, an average of one to two years will have elapsed. During this time most important aspects of estate administration, including notice to heirs, beneficiaries, and creditors, and inventorying and appraising estate assets, require court oversight and approval. Beneficiaries may not receive their share of the estate until the probate process is completed. Additionally, the continuation of a business which is a part of the decedent`s estate may be problematic during probate.