Probate FAQ

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1. What is Probate?

Probate is when the court supervises the processes that deals with:

  • Transferring the property of someone who has died (the “decedent”) to the heirs or beneficiaries;
  • Deciding if a decedent’s will is valid; and
  • Taking care of the financial responsibilities of the person who died.

In a probate case, an executor (if there is a will) or an administrator (if there is no will) is appointed by the court as the personal representative of the decedent’s estate to collect the assets, pay the debts and expenses, and then distribute the remainder of the estate to the beneficiaries (those who have the legal right to inherit), all under the supervision of the court.

2. Is Probate Necessary?

If the person who died did not have any property to transfer, probate is usually not necessary. Probate is typically only necessary when assets have not been transferred to a Trust during the lifetime of the settlors, or otherwise effectively designated to pass to specified beneficiaries, and such assets exceed $150,000 in value.

California has “simplified procedures” for transferring property for estates worth under a certain amount (from $20,000 to $150,000 depending on the circumstances and the kind of property). Probate is generally not necessary to transfer property held in Joint Tenancy or Community Property with Right of Survivorship, and life insurance and retirement benefits.

3. How can I find out if there was a Will?

First, check with the decedent’s close family members and friends to find out if they are aware that a Will has been created. You may also check with the Probate Court in the county of the state where the decedent lived. If the Will was filed, it will likely be available to the public for viewing. And, you can purchase a copy. Or, you can hire a local lawyer or legal service bureau to do a search and get a copy for you.

But many people, even with substantial assets, die without a Will. And, if the decedent held all property through a living trust or a joint ownership arrangement, there may be no need to probate the Will.

4. Does all property go through probate when a person dies?

No. Money from IRAs, Keoghs, and 401(k) accounts transfer automatically as long as the persons are named as beneficiaries and can be paid directly to the named beneficiary. Bank accounts that are set up as pay-on-death accounts (PODs) or “in trust for” accounts (a “Totten Trust”) with a named beneficiary also pass to the beneficiary without probate.

California also has “simplified procedures” for transferring property for estates worth under a certain amount (from $20,000 to $150,000 depending on the circumstances and the kind of property). There is also an easy way to transfer property to a surviving spouse, property held in Joint Tenancy or Community Property with Right of Survivorship, and life insurance and retirement benefits.

5. How long does probate take?

The entire case can take between 9 months to 1 ½ years, or maybe even longer. California law provides the personal representative must complete probate within one year from the date of appointment, unless s/he files a federal estate tax. In this case, the personal representative can have 18 months to complete probate. If probate has not been completed by that time, the personal representative must file a status report to the court to explain what still has to be done and how much time that will take.

6. How much does probate cost?

The cost of probate is set by California Probate Code § 10810 and are as follows and are due prior to close of probate:

  • 4% of the first $100,000 of gross property value
  • 3% of the next $100,000 of gross property value
  • 2% of the next $800,000 of gross property value
  • 1% of the next $9 million of gross property value

When all the costs are added up – these may include appraisal costs, personal representative’s fees, court filing fees and certified copies, costs for a type of insurance policy known as a “surety bond,” plus legal and accounting fees–probate can cost from 4% to 7% of the total estate value, sometimes more.

For your reference, the fees chart below is a quick breakdown of California statutory compensation for attorneys and personal representatives in probate cases for different sizes of estates. It is important to stress that both the attorney AND the personal representative are paid under this statute. Thus, if both the attorney and the executor elect to receive a fee, the amount paid will be double that shown below. This can be an important point with regard to budgeting.

Value of Estate

Compensation to Attorney/Personal Representative

$100,000

$4,000

$200,000

$7,000

$300,000

$9,000

$400,000

$11,000

$500,000

$13,000

$600,000

$15,000

$700,000

$17,000

$800,000

$19,000

$900,000

$21,000

$1,000,000

$23,000

If someone contests the Will, or the case involves more complex probate litigation, there could be additional litigation costs, called “extraordinary fees.” California Probate Code § 10811 provides for “extraordinary fees” for “extraordinary services” by the attorney for which the court may allow compensation, including services by a paralegal or law clerk performing the extraordinary services under the direction and supervision of an attorney. Examples of Extraordinary Services include, but are not limited to: 

  • Litigation undertaken to benefit the estate or to protect its interests;
  • Defense of a contested Will,
  • Legal services in connection with the sale of property held in the estate;
  • Services to secure a loan to pay estate debts;
  • Accounting for a deceased, incapacitated, or absconded personal representative under Probate Code § 10953; and
  • Defense of the personal representative’s account.

7. Who can be the Personal Representative?

Typically, the decedent’s close family members or the named executor of a Will would be appointed as the personal representative of the estate. The personal representative does not have to be a legal or financial expert. But, s/he must have reasonable prudence and judgment and be very careful, honest, loyal, impartial and diligent. This is called a “fiduciary duty” – the duty to act with good faith and honesty on behalf of someone else.

The personal representative should have good organizational skills and be able to keep track of details. It is preferable if he or she lives nearby and is familiar with the decedent’s finances. This makes it easier to do tasks and find important records.

8. If I am named as Executor in a Will, do I have to serve?

No. If you choose not to serve, the Court will probably appoint the alternate executor to be the personal representative. If there is no alternate executor, or if that person doesn’t want to serve, the Court will appoint someone to serve. The Court usually appoints a capable family member or an independent professional fiduciary.

If you decide to be the personal representative, you can resign at any time. But, you may have to give an “accounting” to the Court for the time you served.

9. What does the Personal Representative do?

The Personal Representative must:  

  • decide if there are any probate assets;
  • locate the decedent’s assets and manage them during the probate process. This could take up to a year or longer and may involve deciding whether to sell real estate or securities owned by the decedent;
  • receive payments due to the estate, including interest, dividends, and other income (e.g., unpaid salary, vacation pay, and other company benefits)
  • set up an estate checking account to hold money that is owed to the decedent — for example, paychecks or stock dividends;
  • figure out who is going to get what and how much under the Will. If there is no Will, the administrator will have to look at state law (Probate code Sections 6400 – 6414, called “intestate succession” statutes) to find out who the decedent’s heirs are and determine each heir’s share of the estate;
  • value or appraise the estate’s assets;
  • give official legal notice to creditors and potential creditors of the probate proceeding and the deadlines for creditors to file claims, according to state law;
  • investigate the validity of all claims against the estate;
  • pay funeral bills, outstanding debts, and valid claims;
  • use estate funds to pay continuing expenses — for example, mortgage payments, utility bills and homeowner’s insurance premiums;
  • handle day-to-day details, such as disconnecting utilities, ending leases and credit cards, and notifying banks and government agencies — such as Social Security, the post office;
  • file tax returns and pay income and estate taxes – including a final state and federal income tax return covering the period from the beginning of the tax year to the date of death;
  • after getting the court’s permission, distribute the decedent’s property to the people or organizations named in the Will, or to the decedent’s heirs if there is no Will; and
  • file receipts for distribution and wrap up any closing details for the estate.

10. If I serve as the Personal Representative, will I get paid?

Yes. In addition to your out-of-pocket expenses to manage and settle the estate, personal representatives usually earn a statutory fee of 2% – 4% of the probate estate. The percentage decreases as the size of the estate increases. The Court must approve all fees and expenses. And, in extraordinary circumstances, the Court may allow other fees. See Section 6 above for a full overview of statutory and extraordinary fees.

Fees are taxable as ordinary income and must be reported on your personal income tax return. So, if you are the personal representative and the sole beneficiary of the estate, it usually does not make sense to take any fees. But, the money you get as beneficiary from the estate is income tax free.

11. How do creditors get paid?

Part of the probate process is to notify creditors of the death. Notice requirements vary. In some cases, you must provide direct notice. In others, you must publish a notice in a newspaper in the city where the decedent lived.

Creditors must file a claim with the court for the amounts due within a fixed period of time. If the executor approves the claim, the bill is paid out of the estate. If the executor rejects the claim, the creditor must sue for payment. If there is not enough money to pay all debts, state law determines who gets paid first.

The personal representative most likely will need to sell property to pay approved creditor claims. Remaining claims are paid on a pro-rata basis.

12. If I am a beneficiary and the estate does not have enough money, do I have to pay creditors out of my own pocket?

Generally, no. The law says you cannot be made responsible for others’ general debts without your consent. Unless the decedent gave away his or her assets to someone shortly before dying, or otherwise acted in concert with them to defraud the creditors, the beneficiaries should not have to pay the creditors just because they are beneficiaries.

There may be nothing left in the estate for the beneficiaries after paying the creditors. But, the beneficiaries will not owe the creditors money. Still, if the children or beneficiaries took property or benefits from the decedent or the estate, or assumed liability for care given the decedent, or guaranteed payment, they can be liable for some or all of the decedent’s debts separately.

13. How are taxes handled in probate?

For federal and state tax purposes, death means two things:

  • It marks the date of the close of the decedent’s last tax year for filing an income tax return, and
  • It establishes a new, separate entity for tax purposes, the “estate.”

For federal taxes, you may have to fill out and file one or more of the following forms. (It depends on the decedent’s income, the size of the estate, and the income of the estate):

  • Final Form 1040 Federal Income Tax return (the decedent’s personal income tax return)
  • Form 1041 Federal Fiduciary Income Tax returns for the estate
  • Form 709 Federal Gift Tax return(s)
  • Form 706 Federal Estate Tax return

For California taxes, the executor must file any needed state income tax return, state fiduciary income tax returns during the probate period, estate tax and gift tax returns. There may be other taxes, too, like local real estate and personal property taxes, business taxes, and any special state taxes.

14. As an heir, how do I stay informed of what is happening in the probate case?

You will automatically get notice of certain petitions filed, including the petition for appointment of the personal representative and the final petition when it is time for the estate to be closed and distributed. If the personal representative wants to sell real property, you should also get a Notice of Proposed Action.

If you want to get copies of everything filed in the probate court concerning the estate, file a Request for Special Notice. There is no fee to file this document. You can contact the personal representative directly if you have any questions. You can also contact the attorney for the estate.

But, keep in mind the attorney works for the personal representative and not the heirs. If you have concerns about the way the personal representative is handling the estate, talk to a lawyer.

15. What are the steps in the process to probate a decedent's estate?

Most cases follow these steps:

i. In most cases, the person requesting appointment as personal representative (executor or administrator) hires an experienced probate lawyer to prepare and file a Petition for Probate.

ii. The probate lawyer, or the petitioner without a lawyer, arranges to mail notice to everyone named in the decedent’s Will (when there is a Will) and all his/her legal heirs about the death and the probate hearing. The notice must also be published in the newspaper where the decedent lived to let creditors know about the hearing. Notice gives everyone notified an opportunity to object to admitting the Will and to the appointment of the personal representative.

iii. The hearing usually takes place several weeks after the matter is filed. The purpose of the hearing is to determine the validity of the Will and to appoint the personal representative. Sometimes, the Court will need the people who witnessed the decedent’s signature on the Will to sign a declaration. If there are no objections, the court will approve the petition and appoint the personal representative.

iv. The personal representative must identify, take possession of, and manage the probate assets until all debts have been paid and tax returns filed. This process usually takes about a year. Depending on the terms of the Will (if there is a Will), and on the amount of the decedent’s debts, the personal representative may have to sell real estate, securities or other property.

v. After paying the debts and taxes, the personal representative must file a report with the court. The report accounts for all income received and payments made on behalf of the estate. The judge will then authorize the personal representative to divide the remaining property among the people or organizations named in the Will or under intestacy laws.

vi. The property will be transferred to its new owners.

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