Why Would You Probate A Will
In Encinitas California, probate isnít a particularly onerous process, and there are several legal shortcuts that let many families avoid probate court altogether after a loved one dies. But probate in California can have one big drawback: extremely high attorney fees.
Probate isnít always necessary. If the deceased person owned assets in joint tenancy with someone else, or as survivorship community property with his or her spouse, or in a living trust, those assets wonít need to go through probate. The same is true for assets held in a revocable living trust and accounts for which a payable-on-death beneficiary has been named.
Assets inherited by the surviving spouse or registered domestic partner can also be transferred with a streamlined procedure, using a document called a Spousal (or Domestic Partner) Property Petition. The probate court is involved, but the process is simple and quick. There is no limit on the value of property that can be
Other assets may not need to go through probate, either. If the total value of the probate estate (the assets that canít be transferred to inheritors in one of those other ways) is small enough, probate wonít be necessary. Currently, the cap is $150,000. Inheritors can claim the assets with a simple sworn statement (affidavit) or can go through a streamlined summary probate process. Cal. Probate Code ß 13100.
The Basic Probate Process
If probate is necessary, someone must come forward to start the process. If thereís a will, the executor named in the will should get the ball rolling. If thereís no will, or the person named to serve as executor isnít available, then usually a family member asks the court to be appointed as the ìadministratorî of the estate. Itís the same job.
The executorís job will probably last six months to a year. First, the executor files the will, along with a document called ìPetition for Probate,î with the probate court in the county where the deceased person lived. There is a filing fee of about $435; some counties charge a bit more. Some other forms may need to be filed as well, and formal notices need to be given to beneficiaries, particular family members and creditors. The will, if there is one, must be shown to be valid; usually this is done by having the witnesses sign a sworn statement thatís submitted to the court. When everything is in order, the court issues ìLetters Testamentaryî or ìLetters of Administration,î appointing an executor and granting that person authority over estate assets.
Once the executor has this authority, the process of gathering the deceased personís assets can begin. Itís also the time for the executor to get organized, set up a filing system so that benefits and bills arenít overlooked, apply for a taxpayer ID number for the estate, and open an estate bank account. The executor will need to compile, and file with the court, an inventory and appraisal of all probate property.
If all this sounds overwhelming, remember that it doesnít all have to be done at once. It does involve a lot of paperwork (and usually, phone calls), but most well-organized and conscientious people can handle it. And the executor can always get help, from family members or from an attorney who understands the process and can serve as a guide.
Most probate cases in California are handled under the stateís Independent Administration of Estates Act, which lets the executor take care of most matters without having to get permission from the probate court. ( and following.) The executor can usually sell estate property, pay taxes, and approve or reject claims from creditors without court supervision. Certain other actsófor example, selling real estateórequire court approval. Cal. Probate Code ß 7261.
During the probate process, itís the executorís job to keep all assets safe. For example, a house must be insured and maintained; heirlooms must be safeguarded from theft or damage. The executor is also responsible for filing tax returns for the deceased person and for the estate.
In California, creditors have four months to come forward with their claims. Many estates donít receive any formal claims from creditors; instead, the executor simply pays outstanding bills (for expenses of the final illness, for example). If there isnít enough money to pay all valid claims, however, state law sets out the order in which claims are to be paid from estate assets. California Probate Code ß ß 9050 and following.
Finally, when all bills and taxes have been paid, the executor asks the court to close the estate. Thatís when the executor can distribute all the estate assets to the people who inherit them.
Probate Attorney Fees in Encinitas California:
In most states, lawyers charge by the hour or collect a flat fee for probate work. Not so in California. Itís one of only a few states that let lawyers charge a ìstatutory feeîóan amount that is a percentage of the value of the assets that go through probate. The percentages are set out in state statutes. (Cal. Probate Code ß ß 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
A reasonable amount (determined by the court) for any amounts higher than $25 million
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In practice, this means that probate lawyersí fees can be very high in relation to the amount of actual work done. Probate is usually a matter of filing papers; thereís no trial and there may be no court appearances at all. So, letís say 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 attorneyís statutory fee would be $21,000.
But wait, what if thereís still $200,000 to pay on the mortgage, reducing your equity to $400,000?
The attorneyís fee would still be $21,000óitís based on the gross amount of the probate assets, not what you actually own.
Encinitas California lawyers donít have to charge this wayóthey can bill by the hour or charge a flat fee.
They do it because the statutory fees are such a good deal for them. And the fees are only for ordinary workóif thereís something ìextraordinary,î the lawyer can ask for a bigger fee.
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