Wednesday, January 5, 2011

What is Probate and What to Expect in Probate

Probate is the process of "proving" a will. This means that the authenticity of the will is certified by a court, and the will is then administered, according to its terms, in order to distribute the estate of the decedent.

Probate in California is generally a drawn out process which can be costly, time consuming, and difficult to understand. Probate is often required in order to establish the title to assets so that those assets can be transferred from the decedent to others (beneficiaries or heirs). The establishment of clear title is required in order to resell the assets, and the probate process can take from six months to many years.

During the probate process, the executor (who is the person nominated in the will with the responsibility of administering the estate) must ask the court to be granted authority to administer the estate. Persons having interest in the estate (heirs and relatives, for example) are given notice of the administration of the will and given a chance to object to the validity of the will or to the appointment of the executor (or personal representative).

After all objections to the will are heard (and usually, but not always, there are none) the executor must distribute the estate according to the terms of the will. This includes the following responsibilities:
  • collect, safeguard, and inventory the assets of the estate
  • notify creditors of the estate and pay debts and bills
  • file tax returns and pay taxes
  • petition the court for the final distribution of the estate
  • distribute estate assets according to the terms of the will
In general, you should try to avoid probate because it is expensive. An estate valued at $750,000 will incur probate fees of at least $36,000, even if there are loans outstanding on estate property (see www.marinlawoffices.com). This means that if the estate owns a property worth $750,000, but the decedent had a loan on the property of $500,000, the estate must still pay the $36,000 in probate fees. Also, see the post on this blog entitled "How to Avoid Probate" for ways to avoid probate and minimize probate fees: these include titling property correctly and setting up a living trust. Other fees which will have to be paid for in probate are court fees, publishing fees, appraisal fees, and potentially extraordinary legal fees.

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