Does California Have an Easier Probate Process?

 

The simple answer to this question is yes, California has a simple and faster probate process for small estates that qualify. 

 

 

What is Real Property, and What is Personal Property?

 

Real Property is, generally speaking, land and everything that is attached or built into it.  Personal Property is everything else that is not Real Property such as anything that is tangible, movable property that is capable of being touched, felt, seen, or perceived by the senses. 

 

 

Who may use the California Small Estate Affidavit?

 

Heirs of the estate may use the small estate affidavit process.  It is not likely a good idea to use this process if the estate has a large amount of debt or where the estate is insolvent, or where the beneficiaries disagree about how the assets should be distributed.  In order to use this small estate procedure, 40 days must have passed since death, and no formal probate proceeding may have been opened.  Further, the estate assets (real and personal) must be valued at, or less than $150,000, and the value of the assets are determined at the time of the decedents death.  If the decedent owned real property, California Probate Code section 13200 provides for the transfer of real property valued up to $50,000 by the affidavit procedure (and there are some different requirements associated with this). 

What Assets Are Involved in the $150,000 Limit?

  • Bank accounts
  • Stocks, bonds, or mutual funds
  • real property valued at up to $50,000
  • similar type assets owned in the decedents name alone

What Items Are Excluded from the $150,000 Limit?

The items not included in the decedents estate include:

  • Property held in joint tenancy
  • Items held in a Trust, or Living Trust
  • Cars or vehicles
  • Retirement accounts such as an IRA
  • Life insurance or other accounts with a beneficiary designation
  • Pay on Death accounts

 

Because we live in the San Diego area, the requirement that the real property be valued at less than $50,000 is not usually a reality.  If real property is owned, it is almost always advisable to have a proper estate plan in place.  Not just to avoid probate, but to plan for incapacity, and better control how our estate is handled after our passing, and potentially provide some protection for our beneficiary from predators, creditors, bad marriages, or even from themselves.  

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

For this and other significant reasons, a proper Estate Plan is important to have in place.  We do our best to care for ourselves and those we care most about.  Call me and let’s get your Estate Plan together to get you the peace of mind it provides.

 

Thanks for reading my blog.

William Daniel Powell

619-980-2297

This email address is being protected from spambots. You need JavaScript enabled to view it.

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information

Also, please remember that I speak in generalities in my blog and my website. There are so many different factors that can contribute and completely change the outcome that it would be impractical to discuss all of them here.

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Thursday, 03 December 2015 04:05

Probate Avoidance - Methods and Problems

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Are There Various Alternative Methods to Achieve Probate Avoidance Goals Besides a Revocable Living Trust?

Most of us have heard about the need to avoid probate.  How is this done?  There are various methods.  For example, life insurance passes to the named beneficiary and outside of probate.  Likewise most retirement accounts pass in the same manner.  Another item that can pass outside of probate are bank accounts that utilize whatever form of co-account, or Pay-On-Death (POD) beneficiary.  Motor vehicles can also be titled in the name of two persons.  Moreover, your homes deed can be held in a manner that passes outside of probate.  As with most things in life, there may be consequences to holding various property in different manners, so please consult an attorney licensed in your jurisdiction.

The most important item that passes outside of probate is a Trust.  This is important because the use of a Trust helps you and I to achieve your goals most effectively.  A well designed estate plan not only distributes your property in the method you desire, but it also created to provide:

  • Privacy (a Trust is private whereas a Will is public record)
  • A Plan for incapacity
  • Probate avoidance
  • Better tax and gift tax planning
  • The naming of a guardian for your children
  • Protection of the beneficiaries inheritance (from drug or alcohol problems, or future ex’s, or potentially from means tested public benefits such as Medi-Cal.),

So the simple answer is yes, there are various methods to avoid probate, but no single method can achieve all of these goals, and no combination is likely to achieve these goals as efficiently as a Revocable Living trust Centered Estate Plan.

 

Can’t I Just Put my Child on the Deed to my Home to Avoid Probate?

There are some great reasons why you should avoid putting your child or children on the deed to your home as a method of avoiding probate.

  • Doing so will likely trigger a gift tax
  • Doing so could also trigger Capital Gains Tax
  • Putting your child on the deed makes them a co-owner, and now you must have their consent to do anything with the home including selling or re-financing your own home.
  • It also creates exposure to your child’s creditors, which means if the child get sued, or has tax problems, etc., the home may be used to satisfy the obligation.
  • Inheritance by your child’s heirs is also a possibility which means that if your child dies before you do, you may co-own the home with someone you never considered.

There are some other drawbacks, but suffice it to say that for the reasons given above, there is likely enough weight on the “don’t do it” side of the scale to guide you.

So you see that an average cost of $1,000 to $3,500 for a Revocable Living trust Centered Estate Plan  (plus whatever cost of Trust Administration after the death(s) of the Trustor(s) – the cost will vary depending on complexity) is far more affordable, and a superior method to effectuate your wishes.

See lots of estate planning information on my website at: www.myestate-plan.com

Feel free to call me today, and let's start planning!

Dan Powell

1-619-980-2297

 

****Reminder****

Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California.  Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.

 

 

Thursday, 26 November 2015 16:46

What Does Probate Cost in California?

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Wills, Trusts, Probate, Estate Planning – What does it all mean?

 

What Does Probate Cost? 

In California, attorneys may charge a “statutory fee”.  This is a fee where the attorney charges an amount that represents a percentage of the value of all the probate assets.  However, the attorney does not have to charge the full statutory rate should they choose not to do so.  But, it should be noted that if the attorney performs “extraordinary services”, the court may allow additional payments in addition to the compensation provided by Section 10810 (of the California Probate Code), the court may allow additional compensation for extraordinary services by the attorney for the personal representative in an amount the court determines is just and reasonable.

California Probate Code sets the rate currently as:

  • 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

Keep in mind that the value of the estate is based on the value of the asset, and not its equity.  Therefore, if you own a home valued by the appraiser at $500,000 and you have a mortgage balance of $400,000 – the value is not $100,000 but the full $500,000.  Also, for example, let’s say you also have other property such as accounts and a car or two (worth an additional $150,000) that raise the total value of the estate to $650,000.

So the attorney probate fees for the estate break down like this:

  • 4% of the first $100,000                                 = $4,000
  • 3% of the next $100,000                                = $3,000
  • 2% of the remaining $450,000                     = $9,000

For a total fee of $16,000

So given everything we know now, let’s see what the potential costs will be for a simple $650,000 estate.  This can be any combination of probate property, but let’s say the home is $500,000 (not difficult in California) and an additional $150,000 in probate property.  Please keep in mind that fees given are approximate and may vary by location, changes in laws, or other factors.

  • $400 Court filing fee
  • $650 appraisal fee
  • $150 publication fee
  • $16,000 attorney fees
  • $16,000 executor fees (potential)
  • $400 fee to file Petition for Final Distribution
  • Total of $17,600 to $33,600

So you see that an average cost of $1,000 to $3,500 for a Revocable Living Trust Centered Estate Plan (plus whatever cost of Trust Administration after the death(s) of the Trustor(s) – the cost will vary depending on complexity) is far more affordable than the cost of a $10,000 to $30,000 probate.

See lots of estate planning information on my website at: www.myestate-plan.com

Feel free to call today and we can start planning

Dan Powell

619-980-2297

 

****Reminder****

Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California.  Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.

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This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.

Thursday, 26 November 2015 16:39

What is the Probate Process Anyway?

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Wills, Trusts, Probate, Estate Planning – What does it all mean?

 

What is the Probate Process Anyway?


The first step is to start the process.  If there is a Will, the Executor of the Will starts the process.  If there is no Will, then a family member comes to the court and asks to be named as the “Administrator”.

Next, the Will is filed along with a Petition for Probate.  This petition requires a filing fee of about $400.  The next step is to publish a Notice of Probate in an appropriate and approved newspaper.  The newspaper publishing charges vary.  The charge can be from around $100 to $400 or possibly more.  Certain situations that are more complex may also require additional petitions to be filed – for additional filing fees of course.

The court will then issue Letters Testamentary, or Letters of Administration and interested parties are notified after the Will (if there is one) is validated by the court.

Next, the Executor gathers all of the deceased person’s assets and debts, applies for a taxpayer ID for the Estate and opens a bank account. 

The Executor will gather, and file with the court, an inventory and appraisal of all of the decedent’s probate property.  A court appointed appraiser must be used and also charges a fee. The appraiser fees are generally 0.1% of the value of the assets appraised, so in our first example of a $650,000 estate, the appraisal fee would be around $650.

The Executor must take care of the probate property and protect against loss through insurance, payments of taxes, maintenance, tax returns, etc.

Creditors have four months to come forward with any claims.  After all bills are paid, the estate can be closed with court permission.  The assets can then be distributed.  If there is a Will, then assets will be distributed according to the Will, or if no Will, then through Intestate Succession.

The Executor is also entitled to charge the estate the same fees that the attorney is entitled to charge.  The Executor does not always do this, but they can if they choose. 

Keep in mind that with Probate:

  • It takes about a year to complete the process
  • Many steps or actions can require court approval
  • Nothing can be done with the decedent’s accounts for about four to six weeks after death (assuming there is no other means to access the accounts such as a joint account) which means that the family will often bear the burden of costs for funeral expenses, and other payments (fees, attorney, etc.) while waiting for the Probate to progress.

See lots of estate planning information on my website at: www.myestate-plan.com

Please call today, and we can start planning!

Dan Powell

619-980-2297

 

****Reminder****

Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California.  Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.

****************

This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.

Thursday, 26 November 2015 16:21

What is California Probate in General?

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What is California Probate?

Probate is a judicial proceeding that determines the survivors interest in the decedants property.  This is so whether the Decedant had a Will or not, generally speaking. 

 

See lots of estate planning information on my website at: www.myestate-plan.com

 

My most important job is to listen to your wishes then suggest solutions.  Call today and let’s start planning!

Thanks for reading!

 

Dan Powell

1-619-980-2297

 

****Reminder****

Just like my website, nothing in this blog is intended as legal advice. If you need legal advice, contact an attorney licensed to practice in your jurisdiction. I am licensed to practice law in California.  Further, please remember that I speak in generalities in my blog (and on my website). There are so many different factors that can contribute and completely change the outcome that it would not be practical to discuss all of them here. This is why I speak in generalities. Thanks again for reading.

****************

This document is for informational purposes only.  Nothing in this is to be considered legal advice.  Nothing in this shall create an attorney/client relationship, nor shall it create a confidential relationship.  If you need legal advice (in California), feel free to contact me or someone licensed to practice in your jurisdiction.  I assume no liability or responsibility for actions taken, or not taken, as a result of reading this information.

 

 

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