What is Probate?
Probate is the legal process of transferring a decedent’s estate (title) to the rightful heirs of the estate. The probate process involves (i) collecting and identifying the deceased person’s property, (ii) paying any debts and taxes, and (iii) identifying the proper heirs and distributing the estate property to them. While the court oversees this process, in most cases the work is done by the executor of the decedent’s estate with the help of an attorney.
Probate: Step by step
There are two (2) items that will determine whether an estate must go through the Probate process: (i) an estate worth over $150,000, or (ii) where real property (e.g. a home or land) was held by the decedent at the time of death. While made easier when there is an existing will, the process is long and can be a taxing procedure. Below are the steps that will need to be taken:
- Upon death; of there is a will, the possessor must take it to both the probate court's clerk & to the executor within thirty (30) days of the date of death. If there is no will, anyone wishing to be the administrator of the decedent's estate must file for a Petition for Letters of Administration (Form DE-111), AKA Petition for Probate. The court will decide who will become the administrator where there are multiple petitions.
- A Petition for Probate has three (3) different options: (i) Petition for Probate of Will & for Letters of Testamentary; (ii) Petition for Probate of Will & for Letters of Administration with Will Annexed; and (iii) Petition for Letters of Administration. Our office can help you figure out which option best fits your particular case.
- Once a hearing date is set, the petitioner must then give notice to anyone named in the will or who may have a claim on any part of the estate. In order to provide sufficient notice, they must have an outside party with no interest in the case to notify the beneficiaries and publish a notice in a generally circulated newspaper - a public notification of death.
- After reviewing any and all paperwork, the court will appoint an administrator who will inventory all assets & file an Inventory and Appraisal form (Form DE-160); provide any creditors with a Notice of Administration to Creditors (Form DE-157); and prepare a final personal income tax filing. Creditors will have four (4) months to file a claim.
- Once all debts have been paid/settled, the court will determine who receives the remaining assets, after which they will be distributed to the beneficiaries.
- Finally, an additional hearing will be set to review the administration of the estate. When the court is satisfied, final receipts showing beneficiaries received their distributions are filed; the court finalizes the case; and the administrator is discharged.
advantages to Probate
Bethel Law has administered probate cases in California for 20 years. While we believe in avoiding the formal probate process through a properly funded living trust, there are advantages to probate:
- Supervision of Creditor Claims: If there are creditors’ claims against the estate, it may be beneficial to have probate court supervision so that the validity and amount of the claims can be determined.
- Limited Creditors' Claim Period: While the court process itself may carry on for an extended period of time, Probate also bars creditors’ claims if they are not asserted during the “creditors’ claims period” (generally four months after the executor is appointed).
- Supervision of Distribution: Probate provides court supervision which ensures that the decedent’s property will be accounted for and distributed in accordance with the decedent’s intent. Having a neutral third-party can ensure that assets are accounted for and limit the possibility of mismanagement.
- Keeping the Peace: Sometimes, despite being family, people may not get along well. If family members or the beneficiaries have difficulty in doing so, probate supervision may be beneficial.
disAdvantages to Probate
While court oversight over a Probate case can be largely beneficial, there are some disadvantages that come with court supervision:
- High Cost vs Private Planning: Probate attorney fees are set by the Probate Code of California based upon the gross value of the estate and the administrator of the estate may also elect to receive the same fees as the attorney. There are also a number of court fees (filing fees, notice of death fee, etc.) and creditor claims which, when coupled with the above mentioned fees, can add up quickly and significantly diminish the value of the estate thereby reducing possible inheritances.
- Extended Timeline: Court proceedings can move at a snail's pace, and probate court is no exception. While probating an estate can be done in six (6) months, delays in administration of assets or the court's heavy schedule can cause a case to carry on for two (2) years or more. During this time, the assets must be accounted for and only basic expenses such as mortgage payments and property taxes may be paid. Only by a showing of great need to the court can some assets be released prior to final distribution. Additionally, prospective heirs are required to be notified therefore failure to locate them or a challenge by one may lead to delays in the proceedings.
- Public Proceedings: Court proceedings are matters of public record and therefore the records are open to the public. This includes documents submitted to the court such as a Will. Additionally, as mentioned above, there must a public notice of death in a local publication allowing for heirs to come forward and submit their claim on the estate.
- Lack of Control: As probate proceedings are governed by the Probate Code of California, the degree of control the decedent and the administrator can exert over the distribution and proceedings can be very limited. The Probate Code has guidelines for the judge to determine the hierarchy of heirs and distribute the assets. If a disgruntled heir chooses to challenge a Will, or if there is none, the court will have to determine the final outcome, typically after a delay caused by the challenge. Also, situations can arise where the administrator has to seek court approval prior to taking action. This can create issues where there are volatile assets involves such as investments or real property.
These are some of the services provided through the Bethel Law Corporation. Contact us for further details or clarification on any of the items listed above or to set an appointment.