What is probate and when does this occur?
Probate is a court-supervised legal process which can become necessary after:
(1) a person has died,
(2) it appears that the person’s property value exceeds the probate threshold ($166,250; adjusted periodically), and
(3) the transfer of property is not controlled by asset title (ex: through a living trust, joint tenancy, etc.)
The probate process is used to:
- Authorize someone to administer the estate (often called a “personal representative”, “executor”, or “administrator”)
- Determine what assets and debts the deceased person had
- Pay the deceased person’s debts where appropriate
- Identify beneficiaries
- Distribute the assets after the debts and expenses of administration have been paid
Why should you avoid probate?
Probate is an incredibly expensive pain-in-the-neck. There are many significant disadvantages to the probate process, such as:
Cost – Probate is one of the most expensive ways to transfer property. Probate expenses (such as compensation to the personal representative and to the representative’s attorney) are paid from the probate estate; the amount is determined by law and is basically a percentage of the estate. Here is a breakdown of the ordinary personal representative’s and attorney’s fees (compensation) at different estate values:
- $200,000 estate à $14,000 in fees
- $500,000 estate à $26,000 in fees
- $1M estate à $46,000 in fees
- $1.5M estate à $56,000 in fees
- $2.5M estate à $76,000 in fees
Additional fees may be paid by the estate if the personal representative or attorney perform additional work (called “extraordinary services”). Fees for extraordinary services are typically charged by the hour.
Lots of Paperwork – Probate involves the court system which means there can be extensive paperwork and accountings which must be filed with the court.
Time – Probate can take a long time to complete, anywhere from several months to years.
Lack of Privacy – Probate is a matter of public record, so anyone can see what the deceased person’s assets and debts are, as well as the names of the beneficiaries.
For more information about the Probate Process In California, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (707) 900-4500 today.