Common Questions for California Estate Planning

What is estate planning in California?
An estate plan will direct how your assets will be distributed after you die. You may just want a simple will, or you may be a candidate for a living trust.  For a complete estate plan, you will also need to consider your health care decisions, tax implications, and the financial situation of your beneficiaries. You may also want to consider a durable power of attorney.

Why do I need to consider estate planning?
If you don’t have an estate plan, the State of California will direct distribution of your assets according to law, known as “intestate succession.”  The typical intestate succession in California will give your assets first to your kids, then to your parents or siblings if you have no kids.  If you want to control the distribution of your assets, you will need a will or a trust.

If your total estate is under $100,000, you might need only a will.  You should also consider a power of attorney for financial matters and health care decisions, both of which can make things easier for your family after your death. 

On the other hand, if your estate is more than $100,000, you can avoid probate in California and reduce federal estate taxes if you have an estate plan that includes a living trust.  A simple will does not avoid probate, and might not do much to reduce federal estate taxes.

What Is Probate in California?
Probate in California is the court-supervised process of passing your wealth to your heirs or beneficiaries. The executor of your estate is either appointed in your will or appointed by the probate court if you had no will, and works under court supervision to take control of and manage your assets; pay your funeral costs and final bills; resolve any contests to your estate; pay estate and income taxes; and distribute your property according to the instructions in your will, or according to California probate law if you have no will.

What Is a Living Trust in California?
A living trust is a legal document that allows you to transfer ownership of your property from your individual name to your name as trustee of your trust so that all of your assets are “owned” by the trust. A living trust is completely amendable, and as the creator and trustee of the trust, you have absolute, 100% control of the property in the trust during your life and capacity. Nothing changes except the name on the title to your property.  The purpose of a trust is to avoid probate upon your death.

How often should I have my estate plan reviewed?
You should have an experienced California estate planning attorney look at your estate plan every few years to determine if the distribution plan still fits your wishes, if the executors and trustees are still willing and able to serve, or if other details are up to date and still meet your needs. 

Does a will avoid probate in California?
No, a will does not avoid probate in California; on the contrary, a will only becomes effective after being admitted by the probate court to start a probate. A will, therefore, ensures that probate will be necessary (unless your estate is very small).

Can jointly owned property avoid probate?
Joint ownership of personal or real property may be able to avoid probate, but there are no guarantees. Joint tenancy can also create unanticipated problems.
Joint tenancy includes “a right of survivorship”. Upon the death of one joint owner, the remaining joint owner automatically becomes the sole owner of the property without probate. However, upon the death of the surviving owner (or if all owners die at the same time), the property is subject to probate. Joint ownership merely postpones probate.
Creating joint ownership also may put your property in the hands of creditors.  For example, if a mother puts her property into joint ownership with her son, this property is available to the creditors of the son even though the property was originally owned by the widow.

Does a power of attorney allow me to collect and distribute a decedent’s assets?
A power of attorney is automatically revoked upon your death. A power of attorney merely gives someone else the right to act on your behalf during your life. It does not empower another to distribute assets after your death even when there is a will.

Does probate avoid estate taxes?
Estate taxes, otherwise known as “the death tax” or “inheritance tax”, are payable regardless of whether an estate is probated or not.  Probate is just the administration of an estate through the court process. An estate of $2.0 million or less (2006) is not subject to estate tax.  However, such an estate is subject to probate. Make sure and contact a California estate planning attorney for any updates to this area of law.

Does a small estate have to go through probate in California?
In California, estates that are valued at more than $100,000 of “probate” assets generally have to be probated. There are exceptions made if the decedent is survived by a spouse. If an estate includes real property it must be probated if the real property is greater than $30,000.

What is a probate asset?
Assets that are held in the name of the decedent alone are generally probate assets.  Assets that were owned in joint tenancy or if there is a beneficiary designated on the asset, such as for life insurance and IRAs, generally avoid probate as long as those designations were made correctly.  If there is a surviving spouse, a formal probate can usually be avoided with a spousal property petition.

What is an executor?
The executor is the person who is responsible for management of the probate estate, which includes preparing an inventory, paying bills, filing taxes, and distributing the estate after a court order is obtained. The executor, otherwise known as the “personal representative,” is nominated in the will. If there is no will, or if all of the executors who are nominated have died or are unwilling to serve as executor, California state law provides that the decedent’s closest relatives have the highest priority to be appointed “administrator” of the estate. 

How does the probate begin in California?
Probate begins in California with the filing of a petition for probate at the Superior Court in the county in which the decedent died or resided.  The petition is usually prepared by the attorney for the person who wants to become the executor or administrator. The petition for probate provides details about the person who died, details about the executor, and information about the heirs. The petition also includes information about the size of the estate and whether bond will be required as “insurance” for the estate property.

How long does an average probate take?
A typical probate can take up to one year to conclude.  However, with an attentive attorney and a responsible executor, and the probate has no unusual issues, it could be concluded in about six months. That period includes a mandatory four-month creditor’s claims period. Due to crowded probate court calendars in California, hearings are often held six weeks or more after the petition is filed. There may be other problems with creditors, taxes, or will contests that will delay the probate in California for longer periods.

How much does probate cost in California?
The state of California sets probate fees by law.  See the chart below for guidelines on the probate fees, which does NOT include other court filing fee costs, appraisal fees, and recording fees:

Who else will be involved in the probate process in California?
Unlike a trust settlement, probate is an entirely public process.  All the documents, including the decedent’s last Will, is on file with the Superior Court in the county in which the decedent lived, and available for anyone to see.

In addition, California state law requires that all of the heirs of the decedent, beneficiaries who are mentioned in the will, those who were disinherited and proposed executors or guardians, must be notified of the proceedings.  This notice will state the date and time of the hearing and the courthouse where the case will be heard.

Will I have to appear in probate court in California?
Generally, it is not necessary for the personal representative or any of the beneficiaries of the estate to appear in court. That is the responsibility of the attorney.  There may be times when the executor does need to appear at a court hearing, as in the instance of a Will contest.  In most counties, if the case has been approved by the court and no one is contesting the distribution of the estate, you will never have to appear in court.

Contact Southern California Probate Attorney Thomas Wallin today!