Probate is the legal procedure used to transfer title to assets upon death. The superior Court supervises the payment of debts, taxes and probate fees. The court the supervises the distributions of the estate to the heirs. Unfortunately however, the process is both expensive, time consuming and easily avoidable. A simple probate, without any complications, will take approximately nine months to one year to be completed. However, many probates take longer, sometimes as much as three years or more (particularly if budget and department cutbacks have strained the court’s resources).
The most common misconception about probate is that if you have a will, you do not have to go through the probate process. This is actually the exact opposite. A will, by definition, must go through Probate.
In addition to any taxes that may have to be paid, there are also fees involved. Some of these fees vary, but there are court mandated attorney and executor fees. It is extremely important to note, that the fees described in the chart below are based on the GROSS value of the estate.
For instance, let’s assume that the major asset that you own is a home. Your home is worth $550,000 and you only owe $30,000 against it, leaving $200,000 worth of equity to for your heirs to inherit. According to the California Probate code, because your home has a market value of $550,000 you would have to pay, in addition to any other fees and taxes that you might owe, court mandated attorney and executor fees in the amount of $26,000. This is slightly over 10% of the net value of your estate.
Now try to picture what that means if you owe $450,000 on your home, and because of the drop in the California real estate market, it’s now only worth $500,000. If your estate had to go through probate right now, the court mandated fees alone would wipe out nearly half the value of the estate. This is why creating a revocable living trust, and estate planning are so important.
|Gross Estate Value||Statutory Attorney’s Fees||Statutory Executor’s Fees|