When someone passes away, the procedure necessary to settle the estate depends upon the nature of the planning accomplished prior to death.
If the decedent had developed a proper estate plan prior to death, the procedures are generally much easier, less costly, and less time-consuming. If, on the other hand, the decedent failed to properly plan, then a probate may be necessary.
The following is an overview of the probate process, as well as the process of administering the estate of someone who had developed a revocable living trust.
WHAT IS PROBATE?
If you die without a living trust-based estate plan in Orange County, and/or if you have probatable assets in excess of $184,500, your estate will be subject to the probate procedure.
Probate is a legal proceeding that is used to complete a person’s legal and financial affairs after death. In California, probate proceedings are conducted in the Superior Court for the county where the decedent lived and can take at least six months and sometimes as long as several years to finish.
WHAT HAPPENS DURING A PROBATE?
The person who is nominated in the will must file a petition asking that he or she be appointed as executor of the estate. If there is no will, the Probate Code provides a list of persons who have priority to petition to become an executor.
The will is also filed with the petition, and notices are sent to the heirs and/or relatives of the deceased to let them know when the hearing will be held. If there are objections to the petition, or if the validity of the will is contested, the hearing will be used to resolve any issues that have arisen.
In some cases, this may mean that the validity of the will is not upheld, or that some other person than the original petitioner is chosen to administer the estate. If there are no objections, the petition is granted. The executor then makes an inventory of the estate’s assets, locates creditors, pays bills, files tax returns, and manages the estate assets.
When all of the duties of the executor are completed, another petition is filed with the court asking that the estate be distributed to the heirs. If this petition is granted, the estate administration is completed by distributing the assets to the heirs and filing final tax returns.
The fees are 4% of the first $100,000 of the estate, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9,000,000, and 0.5% of the next $15,000,000. The court will determine fees for estates in the amount greater than $25,000,000.
In addition to the fees listed above, compensation may also be awarded to attorneys and executors in probate cases. Superior Court will also receive a fee depending on the size of the estate.
APPRAISAL OF THE ESTATE
Estates are appraised by probate referees, who determine the fair market value of the assets. The fair market value includes mortgages and other debts, which can result in an appraisal of the property that is higher than the equity that the deceased owned in the property.
Probate referees are appointed by the state controller’s office and they receive a fee based on .1% of the assets that have been appraised.
FEES CAN GO HIGHER
In probates that are complicated by lawsuits or tax problems, the Orange County probate attorney and executor can ask the judge to approve fees that are higher than those set by state law.
In addition to the statutory fees, there are costs for appraisal fees, publication costs, and miscellaneous fees charged by the county.
A typical estate might incur $1,000 to $2,000 in court costs and other mandated fees.
ADVANTAGES OF PROBATE
The proceedings are controlled by a judge, who can decide disputes between heirs or between the heirs and the executor.
Creditors are required to submit their claims against the estate within a four-month period, provided they have been notified of the probate. The executor is required, in most cases, to prepare an accounting and report all their activities.
It usually takes months, or even years longer to probate an estate than to administer a trust. Most estates don’t need the supervision of the court unless disputes occur.
For most families and individuals, the best way to avoid probate is to establish a comprehensive and funded living trust in Orange County with supporting documents.
A living trust is a legal document that assigns a trustee to manage your assets. Unlike a will, a living trust takes effect the moment it is created.
The grantor may already determine the distribution of assets while they are still alive and the trustee may already manage the grantor’s assets immediately. Then, after your death, the trustee will oversee how your assets are bequeathed to your spouse, children, and other beneficiaries.
The living trust is also a revocable trust, which means the grantor may change the conditions in the living trust at any time.
More importantly, a living trust takes effect outside of probate court. Properties and assets may be transferred directly from you to your named beneficiaries without having to pay court charges and attorney fees once the living trust has been established.
This saves your beneficiaries a lot of time, money, and confusion. It also allows you to leave them more of your assets than would be possible had they gone to probate court.
But making a living trust can itself be challenging—you can name the wrong trustee, leave your trust empty, or not know how to put real estate and other non-financial assets into your trust.
You can also lack the necessary supporting documents that may cause confusion or even disputes after your death. To avoid such pitfalls, it’s highly advisable that you work with an experienced probate lawyer you can rely on—who knows how to draft the best living trust to suit your unique circumstances.
A living trust must be funded in order for it to hold title to assets upon your death. To do this, a good comprehensive probate lawyer will help you retitle your assets after executing your estate planning documents.
Though retitling bank and investment accounts is a straightforward process, you will need to rely on a seasoned estate planning lawyer’s experience to help you with retitling real estate, intellectual property, promissory notes, closely-held business stock, and partnership interests.
Choosing a Probate Lawyer in Orange County, CA
Probate is a costly and time-consuming legal process. Dealing with unnecessary complications at a time when all you want to do is grieve for your loved one is the last thing you’d like to happen. Avoid the pitfalls of probate by finding a probate attorney Orange County with vast experience in this area to help guide you and minimize the costs of probate.
Probate law is complex and requires an attorney who is experienced in probate cases to navigate so you don’t wind up spending more than you already have to.
Look for someone who has a track record of successfully representing clients in probate court. Finding someone with a mixed caseload with little to do with probate law may provide a new set of challenges.
Having an attorney whom you know personally and will represent you themself is also preferred.
A probate lawyer you trust and who can communicate well with you and the other parties involved will help make sure you are abiding by the deceased’s wishes and that you honor their memory.
Also, pay attention to their staff. How well a law firm trains its paralegals is a sign of its commitment to training. This is going to be important because their employees will also be helping you out as the need arises with your probate.
Looking for a probate attorney Orange County you can trust? Consider McKenzie Legal & Financial. Our team has vast experience representing clients in Orange County probate court.
Check out our profile and Avvo rating to learn more about our qualifications.
If you would like legal advice or receive more information about probate, you may schedule a free 30-minute consultation with our estate planning attorney serving Orange County CA.
Contact us at McKenzie Legal & Financial at (562) 526-6941 today.