When you begin to think about planning your estate, you will start hearing about probate court. Many online sources recommend that you focus on “probate avoidance”. Those unfamiliar with probate court may jump at the chance to avoid it. But first, you should understand what this court does and how it relates to your estate plan.
In California, probate court is the division of the court system that supervises distribution of estates to heirs. If someone dies without making a will and owns property that needs to be transferred to relatives, then his or her relatives will need to go to probate court. If someone dies with a will and owns property that needs to be transferred, then relatives also need to go to probate court.
While an estate is being probated, the court will appoint an executor (if there is a will) or an administrator (if there is no will). The executor or administrator takes charge of finding and gathering the deceased person’s property, listing their value or getting valuations, and reporting to the court. After all the property has been gathered, the judge will order that the executor distribute the property to the heirs listed in the will. If there is no will, the judge will make an order about who receives the property.
Going to probate court can be very expensive for an estate, depending on how big the estate is. Costs can range anywhere from a few thousand to a few hundred thousand dollars by the time the entire estate gets distributed. These costs include court filing fees, appraisal fees, charges for a surety bond, legal fees, and accounting fees. Since the estate pays the costs, its value could decrease greatly because of the probate process, leaving less money for the heirs. If there is a dispute over how the estate will be distributed or how probate is being handled, the cost will be even higher.
If you or a relative have legal grounds for contesting the will or the distribution of property, you must seek relief in the probate court. Or if the will says you are the estate executor, you may need to make the initial application to probate court so that the will can be administered. Consult an attorney for advice on will contests, acting as an executor, and other probate court issues.
To avoid the high fees and time-consuming legal process, people planning their estates can take steps to keep some or all of their assets out of probate court. Not all assets go through probate, such as life insurance policies, money in IRAs or 401(k)s, pay-on-death bank accounts, and trusts. You can set up your will to “pour over” your assets directly into a trust upon your death, or you can place assets in trust during your lifetime. There are some special kinds of trusts such as Qualified Personal Residence Trusts and Qualified Domestic Trusts that do not go through probate and may lead to tax benefits.
Are you worried about probate costs or need help with a will dispute? Look to Janet Brewer, Esq. for thorough and thoughtful estate planning advice. Janet’s more than 20 years of legal experience will give you confidence and peace of mind. To schedule a “Get Acquainted” meeting, visit Janet's website or call her office at (650) 469-8206.