You Deserve Guidance During a Probate
It can be expensive to die in California without an estate plan. The probate fees, administration costs, and final expenses add up to tens of thousands of dollars. While it’s too late for your loved one to fix this for you, you can fix this for your family by having an up-to-date and comprehensive estate plan. This will drastically reduce the emotional burden and financial costs for your family.
Probate is the process of administering an estate of someone who has died. The goal of a probate is to wind down the affairs of the estate, locate assets, file and pay taxes, pay off creditors and distribute assets to heirs. The biggest misconception about Probate is that you can avoid it with a Will. In fact, a Will is merely considered instructions to a judge on how assets are to be distributed and to whom. If there is no Will, state laws known as intestacy laws determine this
What Triggers Probate
In California if your assets are valued at more than $184,500, Probate may be triggered. Those assets that are owned with another person or that have a beneficiary designation will not be included in the tally of $184,500.
Doesn’t a Will Avoid Probate
The simple answer is it depends. Owning real estate or other assets can trigger probate as described above. When someone passes away, the court appoints an Executor if you have a Will, or an Administrator if you don’t have a Will, to be responsible for the probate. The Executor or Administrator is responsible for all the tasks involved with Probate, such as filing a final income tax return, inventorying assets, paying debts, distributing assets and preparing an accounting that must be approved by the court. This is a highly technical, overwhelming and time-consuming task that should not be taken lightly.
The Pitfalls of Probate in California
- It is extremely time-consuming. The process lasts at least a year and often many years.
- It is extraordinarily expensive. The fees are statutory and based on the fair market value of the estate. This means our State Legislature created a formula for all Probate fees that is based on the fair market value of the estate. For estates that include real estate, the mortgages are not deducted from the fair market value; therefore, the probate fees are very high. A typical probate is tens of thousands of dollars.
- It is a public process. This can encourage distant family members to come out of the woodwork.
- Assets are frozen. It surprises many families that assets are frozen for months during the process and even surviving spouses or minor children do not have access to these assets during that time.
- Creditors are notified. During the Probate process all creditors are notified and have the opportunity to make a claim against the estate for debts that are owed. This process does not happen in a Trust Administration.
Having trusted and competent counsel can make all the difference in a smooth Probate. Goldfarb & Luu will help you determine if Probate is necessary for a loved one who has passed.
How to Avoid a Probate
You can take proactive steps to avoid probate by creating a Trust. However, this must be done while you have mental capacity and obviously before you pass away. When you create a Trust, you will also transfer assets out of your name as an individual to you as the Trustee of your Trust. When you die, your Trust will go through the Trust Administration process instead of Probate. Trust administration is less expensive, private and not as time-consuming.
If creating a Trust is not possible and Probate is unavoidable, not all assets will go through Probate. Certain assets are not distributed by a Will and, therefore, avoid Probate altogether if correctly titled. Assets owned by more than one person in “joint tenancy” or as “joint tenants” or assets with valid beneficiary designations, such as life insurance policies, retirement benefits and investment and bank accounts, will pass outside of Probate to the joint owner or designated beneficiary, whatever the case.
Contact Our Firm and Together, We Can Make the Probate Process Easier
At Goldfarb & Luu, nothing is more rewarding than bringing you comfort and calm during a challenging time. The administration of a loved one’s estate is a complicated matter not only for legal reasons, but for emotional and familial reasons as well.
If a Probate is necessary, our team at Goldfarb & Luu will provide the legal assistance you need to make well-informed decisions to successfully complete the process in the least stressful way. We will simplify the process by providing you with clear instructions and communication every step of the way.