Navigating the Probate Process in California with Expert Guidance

A: Historically, “probate” referred to the process of proving one’s will. Today, “probate” refers to the entire court-supervised process of administering a decedent’s estate, regardless if someone dies with a will (testate) or without a will (intestate). The deceased person is referred to as the Decedent.

The administration process includes the following:

• Appointment as Executor or Administrator. An Executor is a person nominated by and carrying out the terms of the Decedent’s Will. An Administrator is a person the court appoints to administer the estate when the Decedent died without a Will. Usually the Administrator is a family member who comes forward to administer the estate. If no one comes forward, the court may appoint a professional to be the Administrator. A catch-all term for either an Executor or Administrator is the Personal Representative of the Estate.
• Collection of Assets: Identifying and inventorying the decedent’s assets which will be appraised by a court appointed probate referee.
• Payment of Debts and Taxes: Notice to all potential creditors must be given and all valid claims are to be paid prior to assets being distributed and the probate estate being closed. The Decedent’s taxes must be paid.
• Distribution of the Estate: The estate will be distributed pursuant to the terms of the will, and if there is no will, then according to laws of intestate succession, as set forth in California Probate Code sections 6400-6414.

A: This depends on whether the Decedent died with a Will or not. If the Decedent died with a valid Will, then it happens how you would expect it to happen: the Will’s beneficiaries receive the Decedent’s assets.

If the Decedent died without a valid Will, then the Decedent’s heirs receive the Decedent’s assets. The heirs are the people who are in the default estate plan provided by the California Probate Code. This is called “Intestate Succession” because it is the plan provided for a person who died “intestate” or without a Will. Community property is distributed to the Decedent’s surviving spouse. Separate property is distributed in a predicable order of succession amongst family members: A married Decedent’s separate property goes partly to his or her spouse and partly to his or her children. An unmarried Decedent’s separate property goes to his or her children. If there are no children, then parents are first, followed by siblings, and so on.

A: Generally, the following types of property do not need be probated:

• Joint tenancy property, which are assets such as house or accounts co-owned with other people where the title document says “Joint Tenants” or “JT TEN”. This kind of property has the right of survivorship and the asset goes to the other co-owners, regardless of what the Decedent’s Will says.
• Life insurance with a named beneficiary other than the decedent’s estate. Life insurance will always go to the named beneficiary, regardless of what the Will says.
• Property in living trusts
• Money in a bank account which has a named beneficiary who is to be paid on death.
• Individual Retirement Accounts (IRAs) that have named beneficiaries, and
• Community property or separate property that passes outright to a surviving spouse or registered domestic partner (this sometimes requires an abbreviated court procedure)

A: Everything else! The probate estate consists of all property, except the property that falls into the above categories, that has a combined total of $208,850 or more.

At Guideway, we are not attorneys, so we do not represent you in the probate matter. Rather, our clients usually represent themselves “in pro per.” The main advantage to this is massive cost savings over hiring a traditional lawyer – usually to the tune of thousands, or even sometimes tens of thousands of dollars.

We will prepare and file all the paperwork and assist you with the procedural aspects from A to Z. Usually you have to be willing to appear at one or two hearings, but our objective of course will be to see that the paperwork is done so well that the court has no questions for you and your matter is “pre-granted” without an appearance being required.

There are situations when you must not represent yourself though, such as when there are serious family disputes. Is the Will in dispute? You need a lawyer. Is there no Will and multiple family members cannot agree who will be Administrator? You need a lawyer. Does the estate have complicated assets like as a business, or a huge amount of debt? You need a lawyer. This is not an exhaustive list of reasons, and you should always consult a lawyer for legal advice when contemplating any legal action, especially one as complicated as probate.

A: Most of our clients represent themselves with our assistance. While it will take a long time because of the nature of probate, many clients are often surprised that the process ended up being much easier than they expected it to be!

We charge a simple flat fee of $6,000 for probate. The size of the estate does not have a bearing on the flat, so it is very predictable.

Costs charged by the court and other outside are entities are in addition to our fee. When you have an attorney, traditional attorney fees are based on the size of the estate. Use the formula below to compare traditional attorneys fees against our flat fee of $6,000.

4% of the estate’s value for the first $100,000.
3% of the estate’s value for the subsequent $100,000.
2% of the estate’s value for the next $800,000.

An estate worth $500,000 would have to pay attorney fees of at least $13,000.
An estate worth $1,000,000 would have to pay attorney fees of at least $23,000.
An estate worth $1,500,000 would have to pay attorney fees of at least $28,000.

You can see how it pays to be willing to possibly have to attend a hearing or two. What if you want to keep the Decedent’s house? Attorney fees are so potentially high that you may not be able to pay them without selling the house. Our fee is so much lower that keeping the house, if desired, is much more realistic.

Either way, the court will charge filing fees, and other entities will have fees as well, such as the cost of the newspaper ad, the Probate Referee’s fee, bond company premiums, and other such costs. We’ll give you an estimate of these costs when you call us.

A: Petition for Probate

• The probate matter begins by filing a Petition for Probate. If there is a Will, the proposed Executor “lodges” the Will with the court.
• The court sets a hearing date. Before the hearing, the following procedures must be followed:
• Notice of the hearing and a copy of the Petition are mailed to everyone entitled to notice. This includes the Decedent’s heirs and anyone mentioned in the Will. The hearing date must be published in a local legal newspaper that circulates in Decedent’s community. This is to inform the  Decedent’s creditors of the proceedings. Shortly before the hearing, a court employee called the Probate Examiner will review the petition and everything else that has been submitted to see that
  everything is in order. If it is, then usually the matter will be “pre-granted” and the proposed Personal Representative will be appointed without a hearing. But if the court has questions, then an appearance will be needed to answer those questions, or the court will “continue” or reschedule the hearing.
• When the Personal Representative is appointed, the court will issue two documents, both of which are needed for the appointment to be effective: The Judge will sign the Order for Probate, which appoints the Personal Representative, but might have conditions on it. Then the Clerk of the Court issues “Letters” after reviewing the Order for Probate to make sure all the conditions have been met.

A: The most common condition the court imposes sometimes is a “bond” which is like an insurance policy to protect the estate from the Personal Representative’s potential mismanagement. In other words, if the Personal Representative steals or wastes the Estate’s assets, then the bond protects or “indemnifies” the estate’s beneficiaries and creditors and makes them whole again.

A: Most Estates are administered by family members who are not likely to run off with the Estate’s assets, so the bond is a potentially expensive burden on the estate. Also, sometimes it is difficult for a self-represented Personal Representative to convince an insurance company to issue him or her a large bond. The bond can be avoided in the following circumstances:

• If there is a Will, then the Will usually waives the requirement of a bond. But the court still may impose the bond if the court finds good cause to do so.
• When there is no Will, all the people who are entitled to receive the estate’s assets at the end of probate can waive the requirement. They all must sign a written waiver form in order to do this; if one beneficiary refuses to waive the bond, then the bond will have to be posted. If a bond cannot be avoided, the Personal Representative can opt for “Limited Authority” which will at least exclude the equity value of the Estate’s real property, which will reduce the amount of the bond. This will come back to haunt to the Personal Representative later though, as selling the Estate’s real estate will be much more difficult later in the process.

A: When the Personal Representative is appointed and his or her appointment is effective, the Personal Representative then must “marshall” the Decedent’s assets, which just means the Personal Representative has to find out what all the Decedent’s assets consist of, secure those assets, and manage them during the probate. The Personal Representative uses the court papers (the “Letters”) to take control of accounts and other assets. The Personal Representative also has the authority to sell the Decedent’s house at this point. Before the house is sold, the Personal Representative has a duty to protect the house, which might be vacant at this point, so the Personal Representative should make sure the locks are secure and should consider installing a security system.

A: First, consider whether the court gave the Personal Representative “Full Authority” or “Limited Authority” under the Independent Administration of Estates Act. The type of authority will be set forth in the Order for Probate and the Letters the court issued earlier.

With Limited Authority, the court must be consulted on any sale of real property. To do this, the Personal Representative must file a petition to confirm the sale and conform with other procedural requirements, which will take additional time and impose additional expense on the estate. Many buyers (especially all-cash buyers) will not want to wait for the court confirmation process because of the delay, and also because other potential buyers who may appear at the hearing and outbid them for the property.
Full Authority is more common. With Full Authority, the Personal Representative can put the house up for sale without asking the court to confirm the sale. This is preferable and very similar to any other sale of real property.

The Personal Representee must provide notice to everyone though of at least 15 calendar days. This gives everyone entitled to notice the opportunity to examine the details of the sale and to object to the sale if the terms look undesirable to the estate. If someone objects, then the Personal Representative must submit the proposed sale for court approval, which will cause a delay of potentially several months. It should be noted that a few counties do not like to give self-represented Personal Representatives Full Authority. Alameda County is well known for this. One particular reason for hiring both Guideway and a lawyer is to avoid having to settle for only having Limited Authority in counties that do not like to give Full Authority to self-represented individuals. Call us for more information about this issue.

A: When the Personal Representative is appointed, he or she must then “inventory” the estate by listing all of its assets held by the Decedent on the date of death. All the non-cash assets must then be “appraised” by a public official called the Probate Referee. The Probate Referee is automatically appointed by the court when the Judge signs the Order for Probate.

A: Notice of the administration of the estate must be given to the Franchise Tax Board, other governmental agencies, and all potential creditors. Those potential creditors then have four months to submit a claim for payment.

The Personal Representative must file all required tax returns for the Decedent and the Estate. It is best to work with an accountant who specializes in probate and trust tax returns for this process.

Notice also must be provided to any County Assessor where the Decedent owned real property. The County Assessor will usually reassess the property tax  assessment and bring it up to market value as of the date of death (unless the transfer is exempt from reappraisal for some reason, such as when a spouse inherits the Decedent’s property). This is an important issue to keep track of because there may be additional property taxes due resulting from the reassessment from the date of death to the date the house is sold.

A: Once all debts and taxes have been paid and the time for filing a creditor’s claim has expired, the personal representative can petition the court to distribute the estate. Really this means another petition is filed asking the court to approve all his or her acts, and to allow compensation for the attorney (if there is an attorney) and for the personal representative (if he or she is requesting compensation), and to allow the estate’s assets to be distributed to the beneficiaries.

An “accounting” of all the Personal Representative’s acts may be required. This is like the bond wherein all the beneficiaries can sign written waivers waiving the accounting; but also like the bond, if one person does not want to waive the accounting then the accounting must be done. All Personal Representatives must operate as if they will have to account for every single action, so working with a good probate accountant and keeping excellent records early on in the process is imperative.

Another hearing will be held, and when approved, the Personal Representative can distribute the estate.

A: After that final hearing, the process is not quite over yet. The distributees should sign Receipts of Distribution agreeing they got everything they were entitled to receive and return them to the Personal Representative. If the house was kept in the probate, the Personal Representative must record the final Order for Final Distribution in the County Recorder’s Office where the property is located, which puts the property in the beneficiaries’ names. Then the Personal Representative can be discharged from his or her duties and is absolved of further liability to the estate.

A: Sometimes an estate requires court intervention to be transferred to its heirs or beneficiaries, but without the requirement of a “full” probate proceeding. The following simplified procedures may be used in lieu of a full probate proceeding if the estate in question meets the requirements. Examine the following information to see if one of these possibilities fits your situation.

Affidavit for Collection of Personal Property
Personal Property, or anything other than land or buildings attached to land, can be transferred to the Decedent’s heirs without a formal probate as long as the total value of the Decedent’s estate is valued below the threshold for a full probate proceeding, which is currently $208,850.

Personal property usually refers to money and investments. It also refers to the Decedent’s tangible property such as jewelry, artwork, furniture, and other goods. This procedure just cannot be used to transfer the Decedent’s home or other real property, and the Estate has to be “small” or under the threshold. All the heirs or beneficiaries must sign an Affidavit, usually known either as an Affidavit for Collection of Personal Property or a Small Estate Declaration, to the institution where the assets are located. This is usually a bank or other such institution. The Affidavit is not filed with any court or government office; the institution just turns the assets over to the people who signed the Affidavit.

Spousal Property Petition
A surviving spouse may sometimes use a Spousal Property Petition to transfer or confirm property without a full probate proceeding. It is much simpler than full probate administration and is usually completed with only one or two court hearings.

Petition to Determine Succession to Real Property
In order to use this procedure, the estate must consist of real property having a gross value that is less than the threshold for a full probate. In order to ensure that the property qualifies for this simplified procedure, an Inventory and Appraisal form is sent to an appointed California Probate Referee so that he or she can value the estate as of the date of death. If the estate qualifies, then it is much easier than formal probate, requiring only one hearing. If the Probate Referee’s valuation of the estate is greater than the threshold for probate, then you will not be able to use this procedure.

Affidavit Regarding Real Property of Small Value
In order to use this Affidavit, the estate must consist of real property having a gross value of $61,500. If it qualifies, this procedure is even easier than the Petition to Determine Succession, because this procedure does not even require a hearing.