Probate Administration

"Probate" is the legal process by which your assets are distributed after your death to your heirs. "Probate" is similar to the escrow that you use when you buy or seall real property. The process is supervised by the Court that applies the laws and procedures contained in the Calfiornia Probate Code. Through the "probate" process your creditors will be paid and title to your real and personal property is transferred to your heirs. When a person has a written "will" the law says that the person has died "testate." The person's will provides how his or her assts are to pass and identifies the person who will administer the estate. When a person dies without having a written "will" the law says that the person has died "intestate." The basic procedures involved in the "probate" process are essentially the same, whether a person dies with or without a will (testate or intestate). But, what the heirs receive from a person's "intestate" estate are determined by the law and this is called "intestate succession." If the assets you own in your name alone at the time of your death have a total value of less than $100,000, then generally the beneficiaries under your will can use simple statutory procedures to transfer your assets without having to open a formal probate proceeding. The advantages of a probate proceeding are: 1. The procedure is entirely supervised by the Court. 2. The actions of your personal representative (executor or administrator) are also supervised by the Court who will hold him or her accountable for any breach of fiduciary duty they may commit. 3. The procedure gives heirs assurance that specific rules and steps will be followed and the time in which the probate will be carried out. There are also significant disadvantages to probate, however, that most people today believe are significant enough that they choose to have their estate distributed through a "Living Trust" (discussed in this website). The disadvantages of probate are: 1. Probate is entirely public. Anyone can read your will and discover who your heirs are, where they live, what your assets are and their value, and to whom those assets are being distributed. 2. Probate can also be time consuming and delays distribution of your assets to your heirs. Even the most simple probates will take almost a year to complete. Distributions to beneficiaries under a "Living Trust" usually occur quickly. 3. Probate is expensive. Under the Probate Code section 10810 the personal representative and the attorney are each entitled to "ordinary" compensation that is based on the value of the estate assets on date of death plus any gains on sales, plus receipts during the administration of the estate, less any losses sustained if assets are sold. Also, the total value of the estate assets is determined without regard to any existing liens or encumbrances against those assets. These fees are: 4% on the first $100,000 3% on the next $100,000 2% on the next $800,000 1% on the next $9,000,000 1/2% on the next $15,000,000 Estates over $25,000,000 receive a reasonable fee determined by the court. On top of these "ordinary" fees, the personal representative and his/her attorney can request "extraordinary" fees if they have had to pursue or defend assets or claims for the estate or had to deal with will contests or other litigation-based matters, among other things. Extraordinary fees are based on the attorney's hourly billing rate and time; however, such fees must be reviewed and approved by the Court on hearing to all heirs of the Estate.