Here at Jafari Law APC, we encourage our clients to establish and update a complete estate plan. While many people find estate plans to be unnecessary, failure to establish a trust can ultimately leave your loved ones to go to the probate court in order to obtain the assets you were hoping to leave behind for them. Probate court can be daunting; it’s a place where no one really wants to go.
Imagine having your estate being made public while the court decides if your family can keep all or if any at all. Assets worth more than $150,000 will go through probate court in California. This process can take up to 1-2 years in court, depending on if a family disputes over who gets what. The more a family goes back and forth with the process, the more frustrating, and costly, this could become for them.
What is the Probate Process?
When estates have been put into a trust, there is no need for an estate to be probated. Probate typically begins when there is a will, or maybe not a will (decedent died intestate), someone in the family will come forward and file documents with the court requesting that the court designate the petitioner as the administrator (or executor) to distribute the estate to the rest of the heirs. If the family begins to dispute over who gets what, this stage can be lengthy and even require that the petitioner secure a probate bond. If a probate bond is required, that can be even more costly.
What is the Administrator?
The administrator is the person assigned with the responsibility of administering the estate. This is also the person the probate court will designate when a petition for probate is granted. After that, the court issues “ letters testamentary” or “letters of administration” and grants the administrator privileges to have authority over the estate and its assets.
Costs of Probate in CA
California law allows for probate attorneys to charge “statutory fees” as a way for clients to pay for their services rather than charge an hourly rate or flat fees. These statutory fees are a percentage of the gross value of the probated estate, which can quickly turn a probate case that requires no court appearances to become very costly. Below are the current rates for statutory fees in the state of California. The percentages are determined based on the VALUE of the assets, not the amount of equity. Therefore, an $800,000 estate with $200,000 in debt will be charged the same as an $800,000 estate with $700,000 in debt. That means an estate valued at $800,000 will cost approximately $19,000 to go through probate.
- 4% of the first $100,000 of the gross value of the probate estate
- 3% of the next $100,000
- 2% of the next $800,000
- 1% of the next $9 million
- .5% of the next $15 million
- A reasonable amount (determined by the court) for any amounts higher than $25 million
However, this can all be avoided if you invest in an estate plan, which will save your family money, time, and burden of collecting your estate after you pass. A living trust will keep your estate private and will ease the burden of your passing to your family. Call our office today at (714) 546-4600 and find out how we can help you keep your assets out of the state government’s control and into the hands of your loved ones.