Clients sometimes call and say, "I need your help with a probate matter" or "Can you guide me with a probate question?" The first threshold question is whether probate is necessary at all. Some of the dollar figures below change every few years, so confirm them before you rely on them.
Is probate necessary?
If a client has a living trust and all of the assets are in the name of the trust, for example the house is owned by the Smith Family Trust and the bank accounts say Smith Family Trust, none of that needs probate. Sometimes banks and other institutions tell people they need probate, but on closer inspection they do not.
To find out, we analyze the estate. We list all of the client's assets. Say Mr. Smith passed away and his children call to ask whether they need to go to probate court. We take one asset at a time and ask a series of questions.
Was the asset in the name of a trust?
If so, it does not need probate.
Was it held jointly?
If Mr. Smith held the account with one of his children, or with his wife, the other person on the account gets all the money. If Mr. Smith had a $100,000 bank account with his son Johnny on it, Johnny gets all of it. Whether Johnny takes the money to Vegas or shares it with his siblings is a whole other discussion.
Was there a beneficiary?
If the account was in Mr. Smith's name only but he named his daughter Jenny as beneficiary, the money goes to Jenny. It is her money to do with as she likes, including buying a new car. Whether she shares it with her siblings is again a separate discussion.
That leaves a handful of other assets, such as a house or bank account in Mr. Smith's name alone. If the total value of those assets exceeds California's small estate limit, you might have to go through the probate court process after all. For a death on or after April 1, 2025, that limit is $208,850 (Cal.
Probate Code section 13100, as adjusted). It is raised every few years, so confirm the number for the date of death. Below the limit, the family can often collect the assets with a small estate affidavit and no court case. Not all of the assets may need to go through probate. Some may and some may not.
How probate works
Suppose some of the assets do have to go through probate. You generally hire a lawyer, although some very can-do people handle it on their own. Here is the traditional route.
Petition to open probate.
The attorney files paperwork asking the judge to open a probate for this estate. That requires an executor, the person in charge of the probate. It is usually one of the children, a friend or a family member, and the executor is usually listed in the will. If there is no will and no executor, someone has to volunteer. The California Probate Code sets a hierarchy of people allowed to do that job. As long as there is no major objection, someone can step forward and become the executor or administrator of the estate.
Filing fee and first hearing.
The initial filings carry a court filing fee, which varies by county and changes over time. At the initial hearing the court generally approves the executor. In some cases the judge gives the executor great latitude to do what is needed during probate, such as selling property.
Valuation.
The estate is valued. The court has a person in charge of that, usually called a probate referee. You may have your own opinion about the value, but either way the estate will be valued.
Letters testamentary.
The judge then gives the executor a "permission slip" called "letters testamentary." Banks may tell you they need letters testamentary from you. It is simply the judge's permission for the executor to do what needs to be done, including selling the real estate if necessary.
Creditors.
Creditors must be notified, and they have a set period to file a creditor's claim with the court, for example "We're owed $10,000" or "We're owed $50,000." If they do not file during that period, they are out of luck and cannot come back later and say they want their money.
Closing the probate.
Once the estate is fully administered, the property sold and the assets collected, a petition is filed asking the court to close the probate. The judge then issues an order that sets the lawyer's fees and the executor's pay. These are based on the value of the estate. Statutory fees are set by a sliding scale: 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000, and so on, applied to the value of the estate. You can find probate calculators online where you enter the estate value to get an estimate of the lawyer's fees. If the executor asks for a fee, the executor typically gets the same amount as the attorney.
Distribution.
The court orders the distribution of the estate, and the executor sees to it that everything is distributed. There may be some additional paperwork filed at the very end.
How long it takes
Probate can take as little as about nine months and as long as two years, depending on the complexity of the case, how backed up the court is and how many cases the judge is handling.
How to avoid it
As a general rule, you want to avoid probate, and one of the best ways is a living trust that owns all of your assets instead of you. Picture a cup as the living trust, with all the assets inside it. The living trust does not die. It does not get cancer, Alzheimer's disease or dementia. It just keeps going. After the individual dies there is no need to see the judge, because the trust owns all the assets and a new "CEO," the successor trustee, steps in to manage it.
If you do have to go through probate, the best thing is to contact an attorney and work through the process with that lawyer. Let the lawyer take a fee, which is better than doing all that work yourself. Whether the executor takes a fee is up to the executor. Hopefully the process does not take as long as you might fear. The judge wants to make sure the right people get the assets, which is why probate is court-supervised.
If you need help or guidance with a probate matter, please contact our office.