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PROBATE
Probate is a court supervised process in which a deceased person's (decedent) assets (estate) are distributed to the heirs and beneficiaries. For estates that are under $184,500.00, California courts permits an expedited and simplified probate procedures for the distribution of the estate. However, there are certain assets, even if the value is higher than $184,500.00, do not require going through probate. Assets held in joint tenancy, assets that have pre-designated beneficiaries (life insurance, IRA, 401K), assets held in a trust, and assets subject to a T.O.D. (Transfer on Death deed) are examples of the types of assets that will avoid the probate process altogether. Heirs refers to people who have the right to inherit the estate of the decedent when decedent died without a will (intestate). Beneficiaries are people who will inherit from a valid will. Thus, the identity of the beneficiaries or heirs who will benefit from the decedent's estate will be decided by the terms of the will (if there is one), CA law of intestate succession, and or other assets with pre-designated beneficiaries.
The General Probate Process in California:
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Step 1: A personal representative files a petition for probate at the courthouse in the county where the decedent lived prior to his/her death. A personal representative can either be a named executor of the will or an administrator of the estate. Notices must be given to the decedent's legal heirs and beneficiaries. Notices must also be given to potential creditors.
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Step 2: At the first hearing, the court will officially appoint either an executor or administrator to the estate and determines the validity of a will if there is one. The court will issue letters of testamentary (or letters of administration) to the estate representative granting authority to act on behalf of the estate, such as securing the property and assets of the decedent.
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Step 3: The appointed executor or administrator must make a complete inventory of the estate. Debts must also be identified in order to pay off creditors as well as any applicable federal and state taxes. Once all the real and personal property subject to probate are appraised for their value, the estate representative should have a complete list of the appraised value of all the real and personal property subject to probate.
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Step 4: All valid debts must be paid before decedent's estate can be distributed to heirs and beneficiaries. Creditors generally have four months from the time the estate was opened for probate to file claims. Valid creditors' claims as well as applicable state and federate taxes must be paid accordingly.
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Step 5: After all debts and taxes have been satisfied the estate representative petitions the court to close the probate and to distribute the remainder of the estate in accordance to the will (if applicable) or through CA law of intestate succession. The petition must include an accounting of all activities that have been conducted as part of the probate process as well as all the applicable fees to be paid to the representative and the estate attorney. Once the court approves the accounting, and if there are no objections, the court will enter an order to distribute the remainder of the estate and close the probate process.
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Attorney fees for Probate in California:
CA probate fees are preset by California probate code § 10810 which caps the maximum fees that attorneys and executors can charge for a probate. In some cases, attorneys may charge hourly fees or negotiate a different fee structure.
The CA statutory probate attorneys' fees as of 2023:
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
0.5% of the next $15,000,000
A reasonable amount for estates above $25,000,000, as determined by the court.
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In addition to the above statutory fee schedule, an attorney may be entitled to extraordinary fees which are additional compensation for undertaking tasks or services that are beyond the scope of what is considered routine or ordinary of the probate administration process.