Probate or Estate Administration
Probate is a court-supervised process for distributing the individually-owned assets of a deceased person. Assets are distributed to heirs in accordance to the instructions written in the person’s will. When probate-avoidance planning has not been implemented prior to death, the state will require a probate court proceeding if the deceased was a resident of California or owned assets as an individual in the state. Probate can be supervised or unsupervised. In an unsupervised probate, the estate administrator manages assets, pays debts, files required tax returns and various court documents, and distributes the estate assets. However, the court may at any time require the process to be supervised. This typically happens when someone expresses concern about the estate administration. In a supervised probate, the probate judge must approve every detail of the estate administration.
In California, this process is very time consuming and expensive. Probates locally are taking a minimum of fourteen months to two years to complete simply because the system is so over-loaded. The court sets statutory fees for the attorney and the personal representative based on the amount that is a percentage of value of the assets that go through probate. The percentages are set out in state statutes. (Cal. Probate Code §§ 10810, 10811.)
Here are the current rates:
- 4% of the first $100,000 of the gross value of the probate estate
- 3% of the next $100,000
- 2% of the next $800,000
- 1% of the next $9 million
- .5% of the next $15 million
For example, if your probate estate contains a $600,000 house you own in your name alone, plus some bank and brokerage accounts and a car. The total value is $900,000. The attorney’s statutory fee would be $21,000 and the personal representative fee would be $21,000 for total fees to the estate of $42,000.00 before any family member would see a penny.
As you can see, a little estate planning during life, including the use of a revocable “living” trust, could save your family a great deal of money, time and stress. In Southern California, it doesn’t take much to have an estate worth more than $500,000; it takes little more than a house with a mortgage and a checking account. As attorneys, we love probate. We know the procedure and we are happy to guide you through the process and collect our statutory fee at the end. There is a place for probate in rare situations but in most cases, this usually is not what is best for your family.
Contact us today to discuss your estate and probate administration questions.