You can avoid probate by gifting your property to your loved ones while you are alive. This removes the property from your probate estate and transfers it to the people you want to have it. Gifts may be subject to gift taxes and they will be counted toward your available exemption amount for estate tax purposes.
Another way to avoid probate is to title your property in such a way that it will not be part of your probate estate. You can own property as joint tenants with the right of survivorship, where the property will automatically pass to the surviving joint tenant. Property that can be transferred at death to named beneficiaries is another option to avoid probate. Examples include “payable on death” accounts and revocable payable on death deeds. The examples above are most easily accomplished when you want the property to go to a small number of competent adults.
However, if you want to avoid probate but also have the property be shared among several people, or you want to condition receipt of property on an event such as reaching a certain age, or achieving a certain level of schooling, you will want to seriously consider a revocable living trust. When the trust creators die, the trustee can easily and quickly transfer the trust property to the people who are supposed to receive it, or hold that property in trust for their benefit and in the way specified in the trust.
Lastly, California provides special procedures for “small estates”, or estates whose value falls below specific thresholds, that are shortcuts through probate, including the use of affidavits to transfer property, and special petitions that can be used instead of a full-blown probate petition.
If you would like to discuss your estate planning or probate or trust administration questions with an experienced California estate planning attorney, or have questions that weren’t answered here, we invite you to contact JDS Law, Inc. to schedule a consultation.
The total cost of probate will vary depending on the estate’s value, but a good rule of thumb is to plan on all probate-related costs and fees, including statutory attorney’s fees and personal representative compensation, to be between 7% and 10% of the value of the estate. If the probate involves litigation, complex assets, or business operations, and the attorney has to render extraordinary legal services, the price tag can be much higher.
It is a years-long process, and most of the estate property cannot be transferred until the end of that process. Even a simple, uncontested probate should be expected to take at least 12 months. A probate matter with many beneficiaries, creditors, litigation, or disputed assets can go on for many years.
Probate is a forms-driven, timeline-intensive process involving hundreds of steps that must be taken in a specific order and by strict deadlines. While probate court judges are sympathetic to estate administrators, the court cannot overlook skipped steps or missed deadlines, and mistakes in probate cause costly and lengthy delays. By hiring an experienced probate attorney, you will have a knowledgeable guide beside you. Attorney’s fees in probate cases are set by statute and involve a sliding scale, based on the gross value of assets in the estate.
Probate is court-supervised administration of an estate. It will require numerous court filings and at least two court hearings. Probate is started by filing a Petition for Probate with the correct probate court so that a person can be appointed to administer the estate. The petition packet consists of many forms that must be completed and filed with the court. A hearing will be set for the court to hear the petition and notice must be given to known creditors and also published in a newspaper of general circulation.
At the hearing, any objections will be given, and a personal representative (called an executor/executrix if there is a valid will; called an administrator if there is not) will be appointed by the court and takes on the duties and responsibilities of distributing the deceased person’s property to beneficiaries (if there is a will) or heirs (if there is no will). Once appointed, the personal representative will manage all aspects of the probate estate, including inventorying assets, paying debts, responding to creditors’ claims, managing real estate or business concerns, and filing an accounting.
When all objections and creditors’ claims have been addressed, and the estate is ready to be transferred to the beneficiaries/heirs, the personal representative will file and give notice of a Petition for Final Distribution, and another hearing will be held. If the personal representative hired an attorney to help with probate, the attorney’s compensation is set by the Probate Code and must be approved by the court, typically as part of the petition to close the estate.
Once the Final Petition is granted, all distributions have been made and receipts filed with the court, the personal representative’s final task will be to file and give notice of a Petition for Discharge, which the court will review without a hearing. Once this document is signed, the estate is officially closed, and the personal representative’s duties fulfilled. The entire probate process, from first petition to last, will take approximately 18 months to 3 years for a simple estate and could be many years for a complex or contested estate.