Probate FAQ

Generally, estates with “probatable assets” of at least $150,000 or real property valued at $50,000 or more must be probated by a court.  If the person who died does not have property to transfer, probate is generally usually not necessary. Probate may be preferable if the estate owes debt or if is prefereable to create a deadline for creditors to file claims.

Even when simplified procedures are available, it may be preferable to pursue a formal probate.  This may include situations where estate debts and tax claims are expected.

Certain assets may be transferable to beneficiaries without probate.  These include:

• Assets held in joint tenancy
• Life insurance benefits
• Bank accounts set up as pay-on-death or Totten Trusts
• 401(k) and IRA Benefit Plans
• Keogh Plans

A trust is generally designed to avoid probate.  When a decedent’s property is held in a living trust that property will pass to the beneficiaries according to the trust guidelines and without probate.

The costs of probate are set by state law and are paid from the estate assets.  These costs include:

• Appraisal costs– 0.5% of the estate’s total value.
• Executor’s fees– This is a calculated as a percentage of the estate value as follows:

(1) Four percent on the first one hundred thousand dollars ($100,000).

(2) Three percent on the next one hundred thousand dollars ($100,000).

(3) Two percent on the next eight hundred thousand dollars ($800,000).

(4) One percent on the next nine million dollars ($9,000,000).(5) One-half of one percent on the next fifteen million dollars ($15,000,000).

(6) For all amounts above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the court.

• Attorney’s fees– These are calculated in the same manner as the executor fees. If someone contests the will in court, litigation costs can be thousands of dollars.
• Court fees– These amounts vary by county.
• Publication costs– This amount varies depending on the publication. A personal representative is required to use a Court approved publication that is distributed where the decedent lived.
• Surety bonds– The surety bonds amount is left to the discretion of the court.

Most of the costs associated with a probate administration are paid out of the estate assets before probate is closed.  These include creditor payments, executor and attorney fees, and appraisal costs.

Filing fees and notice publication costs are paid by the filing party, who may be eligible to be reimbursed by the estate.  This is generally the personal representative but, in certain instances, this amount may be advanced by the executor’s attorney.

Under California law, the personal representative is required to complete probate within one year from when they are appointed by the court.  If federal estate tax is filed, probate can be completed within 18 months.

If probate is not completed in this time, the Court will require that the personal representative file a status report to the court that explains what is to be completed and how much longer that will take.  Otherwise, the beneficiaries can request that the court order an accounting, take other actions to close probate, or even remove the personal representative and appoint someone else.

A will contest, a large or complex estate, or hard to find beneficiaries may take years to resolve.

Probate proceedings must be initiated in the county that the decedent lived at the time of his or her death.

If there is a will, the person who is named as executor will usually be appointed as the personal representative.  They will be in charge of the probate process and will be required to manage the estate according to the probate rules and procedures.

If there is no will naming an executor, or the person named as executor in the Will is unable or unwilling to be executor, the court will appoint an administrator, who will have the same duties as the executor. The court will often appoint a relative of the decedent or a person who will inherit part of the estate.

The personal representative does not need any professional expertise but must be reasonably prudent as well as careful, honest, loyal, impartial and diligent. The personal representative also has a “fiduciary duty.”  This duty requires that the personal representative act with good faith and honesty on behalf of someone else. The personal representative should also be able to keep track of details and have strong organizational skills. It is often helpful if he or she lives near the county the probate has been filed in and is familiar with the decedent’s finances. This makes it easier to complete the tasks associated with probate and find important records.

The Court does not typically supervise the personal representative.  However, sometimes the personal representative will be required to get the Court’s permission before selling the estate’s real estate or business interests.

Court permission is also required before:

• Paying fees to the personal representative.
• Paying fees to the attorney of the personal representative.
• Making a preliminary distribution of property to beneficiaries.
• Closing probate.

The Personal Representative must:

• Determine if the estate has any “probatable assets”
• Locate these assets and manage them while probate is being conducted
• Receive money that is due to the estate
• Open an estate checking account to receive and hold money that the decedent is owed
• Determine what beneficiaries will receive, either according to the will or appropriate law
• Determine the value of the estate’s assets
• Give legal notice to the estate creditors and potential creditors
• Review all claims made against the estate for validity
• Pay the decedent’s funeral bills, debts, and any claims determined to be valid
• Pay continuing expenses such as mortgage payments, utilities, and the estate’s homeowner’s insurance
• Coordinate the estate’s daily business such as terminating leases, closing credit cards, notifying banks and government agencies etc.
• File the estate’s necessary tax returns and pay any required taxes
• Obtain the court’s permission and, following such, distribute the decedent’s property to the appropriate beneficiaries
• Complete closing details that are required for the estate

No. If you do not serve, the Court will appoint an alternate executor.  This may be a capable family member or, if none are able to serve as an executor, the court may appoint a professional fiduciary.

Yes.  Executors will be reimbursed for out-of-pocket expenses incurred during the management of the estate and will also receive a statutory fee that is calculated as a percentage of the estate. The Court may also allow other extraordinary fees. All fees and expenses require court approval in advance of distribution.

If a personal representative does not perform as required, the court may refuse compensation and may replace them. The personal representative may also have to pay additional costs for damages that they caused.

The personal representative may have to personally pay additional costs if they:

• Manage the assets of the estate improperly.
• Fail to collect money on the estate’s behalf.
• Overpay the estate’s creditors.
• Sell an asset without appropriate authority.
• Sell an asset at an inappropriate price.
• Fail to file tax returns in at the correct time,
• Give estate property to the wrong beneficiary.
• Give estate property to beneficiaries before paying all creditors.

No, a lawyer is not required to conduct a probate but having a lawyer will help ensure that required deadlines are met and can prevent mistakes by the personal representative. A lawyer represents the interests of the personal representative, not the beneficiaries.

A will contest occurs when someone files an objection to a will or produces a second will.  These are not uncommon but will contests are rarely won. These contests, however, can cost significant time and money.

There are a variety of causes for a will contest.  The most common ones include:

• A later will which may replace the earlier will.
• The Will offered for probate is alleged to be:
  • Made when the decedent was not mentally competent
  • The result of fraud, mistake or “undue influence”
  • Not properly executed
  • Invalid for some other reason
  • A forgery
  • Invalid due to a pre-existing contract

If somebody contests a will, you should hire an experienced lawyer.  A will contest may result in the probate court invalidating all or part of the Will.

If a person dies without a will, the probate court will appoint a personal representative and estate assets will be distributed to the decedent’s relatives according to law.

If real property owned by the decedent is located in another state, that property will be distributed in accordance with that state’s laws.  This requires completion of an additional probate in the state where the real property is located, as well as a probate proceeding in California.

In order to receive payment, the decedent’s creditors are required to file a claim with the court during a fixed period of time. The executor may approve or reject the claim.  If approved, the bill is paid out of the estate, otherwise the creditor must sue for payment.

Not usually. Beneficiaries must provide consent in order to be made liable for the general debts of others.  Beneficiaries are generally not be required to pay creditors except in cases where the decedent and beneficiary acted in concert to defraud the creditors.

Before closing a probate, the following tax matters may need to be addressed:

• Federal personal income tax return
• Federal Fiduciary Income Tax returns for the estate
• Federal Gift Tax return(s)
• Federal Estate Tax return
• California State Income Taxes such as the income tax return, fiduciary income tax returns, estate tax returns, and gift tax returns.
• Local real estate and personal property taxes
• Business taxes
• Any special state taxes.
• Taxes owed for years before the decedent’s death.

The Probate Court of the county where the decedent lived may have a copy of the will on file and, if so, the will is most likely available to the public.  A lawyer or legal services company may also be hired to conduct a search for the will.  Many people, however, die without a will.

If you are in possession of the will of someone who has died, you are required by law to deposit the will with the superior court in the county that the decedent lived in.  This is no fee required to deposit the will.