California Probate

Probate in California is a court process to administer the estate of someone who has died (the decedent). Probate is governed by the California Probate Code.

Here’s what happens in a California Probate:

• The decedent’s family hires a probate attorney.
• The probate attorney files a petition for probate with the original will and schedules the initial hearing with the local probate court.
• Notices are sent to the decedent’s heirs, beneficiaries and creditors to give them a fixed time period to contest the estate or make a claim on the estate
• If the court approves the probate petition, the judge will issue Letters Testamentary.
• The decedent’s assets will be identified and appraised.
• Debts and taxes will be paid from the estate.
• When the judge is satisfied that all disputes have been resolved, all parties are satisfied with the accounting, and all debts and taxes have been paid, the court will schedule a final hearing.
• At the final hearing, the judge will issue an order which instructs the executor to pay the probate attorney and executor and to distribute the estate assets to the beneficiaries.
• A typical California probate takes more than one year to complete.
• All the court filings, which include your family, asset and financial information become a public record.

Probate Attorney

A probate attorney is a California licensed attorney hired by the executor. The probate attorney is the quarterback of the probate process. The probate attorney will guide the executor through the legal issues and procedural steps and represent the estate in probate court.

You don’t have to hire a probate attorney. Hiring an attorney is not required by the California Probate Code. You could try to navigate the probate process yourself. But it is difficult. And most people hire a probate attorney.

Petition for Probate

A petition for probate must be filed in the probate court in the county where the decedent lived. The petition for probate starts the probate process. When you file the petition for probate, the court will set an initial hearing date, usually two months out.

Notices

Notice of the filed probate petition, including the hearing date given by the Court, must be mailed to the decedent’s heirs, beneficiaries, creditors and anyone known to have an interest in the estate at least 15 days before the hearing (California Probate Code section 8110).

California Probate Code section 8121 requires notice of a pending probate petition to be published in a newspaper of general circulation in the city where the decedent lived at the time of death or where the decedent’s property is located. This published notice must be posted at least 15 days before the hearing.

Letters Testamentary

When the court approves the probate petition, the judge will issue Letters Testamentary to the executor. Letters Testamentary is an old fashioned court term which essentially means a document from a judge authorizing the executor to act on behalf of the estate.

Probate Assets

With the Letters Testamentary in hand, the executor must then get possession of the decedent’s probate estate assets. This is called marshaling the assets. (California Probate. Code section 9650). Sometimes it’s easy to marshal the assets because the family members know what the decedent owned. Sometimes it’s not easy because no one knows what the decedent owned. In those situations, the executor may have to review the decedent’s mail, look for bank statements and review tax returns. 

Once the assets are identified, the executor must get possession of the assets and retain a court approved appraiser, called a probate referee, to value the assets. The probate referee will prepare an Inventory and Appraisal which must be filed with the court.

Debts, Creditors and Taxes

California Probate Code section 9050 requires the executor to “give notice of administration of the estate to the known or reasonably ascertainable creditors of the decedent.” The executor must identify any creditor of the estate and give notice to each creditor within four months after the date the Letters Testamentary are issued or 30 days after the executor first learns about the creditor, whichever is later.

Creditors have a limited period of time to file a claim against the estate. Creditors must file their claim with the probate court before: (1) four months after the date the Letters Testamentary were issued to the Executor, or (2) 60 days after the notice was mailed or personally delivered to the creditor, whichever is later. If a creditor fails to file within that time frame, the creditor will no longer be able to collect their debt against the decedent’s estate.

The executor must offer proof to the court that all taxes have been paid, including property tax, California income taxes and federal income, gift and estate taxes.

Final Probate Court Order

Once the decedent’s debts and taxes have been settled, the estate may be closed, and the executor can file a Final Report and Petition for Final Distribution. When the probate court approves the Final Report and Petition for Distribution, the executor is authorized to distribute the remaining probate assets to the beneficiaries.

If the decedent died with a Will, the distributions are to be made to the beneficiaries as described in the Will.

If the decedent died without a Will, then the estate is “intestate'' and the court will order the executor to distribute the probate assets to the decedent’s heirs at law, as required in California Probate Code sections 6401 and 6402. Generally, “heirs at law” include the Decedent’s spouse and children (if any), then parents, then siblings, then nephews and nieces, uncles and aunts, then cousins, etc.

After the executor makes the distributions, the executor must file with the probate court receipts signed by each beneficiary.

Finally, the executor will file a Petition for Final Discharge and Order, which will discharge and release the executor from further duties.

How Long Does a California Probate Take

In theory, a simple California probate could be completed in six or seven months, but it rarely is. Even in the simplest of estates, there is always something that brings delays.

Many years ago we handled what we thought was a very simple probate. The decedent had a will which left his modest estate, which consisted of his home and bank account, to his only child. He was not married, and he had no debts. 

The problem was that the executor, the decedent’s sister, could not find the original will. She only had a copy. During the hearing, the judge insisted on seeing the original will. I told him the attorney who drafted and witnessed the will could not be reached because he was in Africa helping to build a hospital and he would be there for several months. The judge told me the probate could not go forward until I got the attorney to sign a declaration stating that our copy of the will was indeed a true and correct copy of the original will. He suggested that I secure the attorney’s signature by flying to Africa or waiting a few months until the attorney returned. Consequently, the probate took over a year to complete.

There is always something to delay the probate process. Simple California probates generally take at least one year to complete. More complex probates could take years.

What Does Probate Cost?

Here are the costs you can expect in a California probate.

Attorney and Executor Fees 

California Probate Code section 10810 sets the fees that attorneys and executors can charge for a probate. These statutory fees are based on the estate's value, as determined during the probate process. The estate value is the gross value of the probate estate assets, not the net value.

The California statutory probate fees for the attorney and for the executor are:

• 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
• One-half % of the next $15,000,000
• For an estate larger than $25,000,000, the Court will determine the fee     

Both the attorney and the executor receive the statutory fee. And in many cases, the court can order extraordinary fees - extra fees in special circumstances. 

Court Costs

The court filing fee to file the probate petition is $435.

Other fees will include the publication of the probate notice and certified copies of court documents. There are also fees for the appraisal of the estate, which is typically .1% of the value of each appraised asset.

Examples of California Probate Fees

The compensation for the probate attorney and the executor will be based on the gross value of the estate. (BTW this means if you had a home worth $1.5M and a $1M mortgage, your home’s probate value is not the $500k equity, but the $1.5M value.)           

• $500,000 Estate $13,000 x 2 = $26,000
• $600,000 Estate $15,000 x 2 = $30,000
• $700,000 Estate $17,000 x 2 = $34,000
• $800,000 Estate $19,000 x 2 = $38,000
• $900,000 Estate $21,000 x 2 = $42,000
• $1 Million Estate $23,000 x 2 = $46,000
• $5 Million Estate $61,000 x 2 = $122,000

Summary

As you can see, probate is bad. It is complicated, time consuming, it erodes your family’s privacy and it is very expensive.

The good news is that you can avoid probate with a revocable living trust. If you create a revocable  living trust and transfer your probatable assets to your trust, you will avoid probate.