What is Probate?
June 25, 2021
In a nutshell, Probate is when the court oversees the distribution of your assets (or of those of a family member). Probates are used to approve someone’s will and when someone dies intestate: without any estate plan documents in place.
People generally do not like to think about or plan for their death. We do not like to think how our assets will be distributed: you won’t be here, right…. But your family and loved ones will be. They will be coping with and grieving your death and having to navigate a court system at the same time.
Navigating is the right word, too. In Bay Area Counties, probate examiners review all documents submitted to the court. They will deny petitions and continue hearings for the smallest of errors (and sometimes “perceived” errors). What should be a simple, straight-forward, uncontested probate will take an average of 18-24 months to complete.
And during the probate process, the assets are guarded by the executor and all distributions must be approved by the court: with most distributions being made at the end of the probate.
There are additional costs for Probate, as fees paid to the Executor/Administrator and Attorney are set by statute and based on the value of the estate. In California those fees are currently:
|
First $100,000 |
4% ($4,000) |
|
Second $100,000 |
3% ($3,000) |
|
$200,000.01-$1,000,000.00 |
2% (up to $16,000) |
|
$1,000,000.01 - $10,000,000 |
1% (up to $90,000) |
|
$10,000,000.01-$25,000,000 |
½% (up to$75,000) |
|
$25,000,000.01 -…… |
Court Discretion |
So, if you own a home that is valued at $1,500,000 but has a mortgage of $750,000: the value is $1,500,000 as encumbrances do not reduce the value. The fees paid to both executor and attorney in this scenario will be $28,000 each.
Probate is time-consuming and can be expensive. It is an arduous process that you aren’t here for, but your family and loved ones are. They will have to endure probate as they are grieving.
Creating an estate plan that helps your family and loved ones to avoid Probate is one of the best gifts you can give them.
Contact us today to discuss avoiding Probate and to create your Estate Plan today.
Lisa Corman, Esq., Senior Counsel in our Oakland/East Bay office, can be reached at (510) 832-7770 ex. 150 or lcorman@ericksenarbuthnot.com.