-
Most people leave behind an estate when they die that consists of all assets, both tangible and intangible, owned by the decedent at the time of death. Probate is the legal process by which those assets are identified, located, valued, and eventually distributed to the intended beneficiaries and/or legal heirs of the estate.
-
-
If the decedent left behind a valid Last Will and Testament, the individual named as the Executor in that Will is responsible for overseeing the probate process and the terms of the Will are used to determine how the estate assets are distributed. If the decedent died intestate (without a Will), someone typically volunteers to oversee the probate of the estate using the state intestate succession laws to determine how assets are distributed.
-
-
Although the probate process is unique for every estate, common steps in the process include:
-
- Identifying, locating, and valuing all estate assets.
- Categorizing assets as probate or non-probate assets.
- Opening the probate of the estate.
- Notifying creditors of the estate that probate is underway.
- Reviewing and approving or denying creditor claims.
- Prioritizing and paying approved claims.
- Defending any challenges to the Will or litigating any claims.
- Calculating any paying federal (and state, if applicable) gift and estate taxes.
- Transferring any remaining assets to the named beneficiaries and/or legal heirs of the estate.
-
-
-
A complex estate can take months, even years, to get through the formal probate process. Creditors have up to a year to file a claim against an estate in California. Those claims then must be reviewed and paid or denied. For this reason, even a relatively small estate can easily take over a year to get through formal probate. Along with the time it takes to get through formal probate, it can also be very expensive because everyone involved in the probate of the estate (Executor, lawyers, appraisers, accountants) is entitled to a fee. This can dramatically diminish the value of the estate that is ultimately passed down to loved ones.
-
-
Assets are classified as probate or non-probate at the beginning of the probate process. Assets that are considered non-probate assets bypass probate altogether and can be distributed directly to the named beneficiaries. Common examples of non-probate assets include:
-
- Assets held in a trust
- Proceeds of a life insurance policy
- Certain types of jointly held property
- Assets held in an account with a “payable on death (POD)” or a “transfer on death (TOD)” designation
- Certain retirement and pension accounts
-
-
-
California offers three potential alternatives to formal probate for small estates that qualify. Using one of these alternatives will dramatically reduce both the time and expense of probating an estate. The small estate options available in California include:
- Small estate with only personal property. This option may be available for a small estate if the estate consists of personal property only valued at less than $166,250 (as of 2022). When an estate does not include real property, such as a house, the assets that make up the estate may be able to be distributed to the new owners using an affidavit. The value of the estate is determined as of the date of death, not the value today. In addition, you must have the legal right to inherit the assets and you must wait 40 days after the decedent’s death before initiating the transfer of assets.
- Small estate with personal and real property. This option applies if the total value of all probate assets is valued at $166,250 or less (as of 2022). If the estate includes both personal and real property but is worth less than $166,250, you may be able to use a form entitled Petition to Determine Succession to Real Property. You will have to file the Petition with the court, obtain and file an Inventory and Appraisal, and provide notice of a hearing. You are also required to have the legal right to inherit the property and must also wait 40 days after the decedent’s death before initiating this simplified probate procedure.
- Spouse or domestic partner of the decedent. If you are the decedent’s spouse or domestic partner, you may be able to file a Spousal or Domestic Partner Property Petition which will result in a court order that states what your share of the community property is and what part of your deceased spouse or partner’s share of community and separate property belongs to you.
-
Contact Us
For additional information, contact the Collins Law Firm by calling (310) 677-9787 to register for one of our FREE estate planning workshops.
