It can be very overwhelming when we experience the death of a loved one. If someone close to us, like a parent passes away without establishing a trust, their assets will enter a process called probate.
The legal process known as probate takes place after someone dies. This process has been put in place to ensure that a person’s possessions are given to the right people, and any debts that may be owed are fully paid.
When Is Probate Necessary and When Can I Avoid Probate?
Probate can only be fully avoided in certain situations, such as:
1. All the decedent’s assets are held by a properly drafted and funded living trust;
2. All the decedent’s assets are held in joint tenancy and would pass to the surviving joint tenant as a matter of law (i.e., joint tenancy property or joint bank accounts); or
3. The value of decedent’s assets is less than small estate threshold ($184,500 in 2022) and does not consist of real property.
If the decedent did not have a trust or did not properly fund the trust with all their assets,
even if the decedent had a valid will, a probate will be necessary, and the court will need to appoint an estate administrator to represent the estate as they marshal the assets of the estate and allow for any claims or debts to be presented.
If you do not have a properly drafted and funded living trust, I highly recommend working with an estate planning attorney to get this in order. To learn more about estate planning click here
How Does Probate Work?
First steps will be different depending on if a valid will exists. These are the general steps that will need to be done when an heir begins the probate process:
1. Lodge the Original Will with the Court.
California requires that a decedent’s will be lodged with the Court within 30 days of the decedent’s death. If a will does not exist, you will skip this step.
2. Petition the Court to Appoint an Estate Administrator.
To initiate the process, an heir or creditor of the decedent must petition the Court to appoint an administrator of the estate. If a will exists, the executor named in the will would be nominated as the administrator. If a will does not exist, an heir or creditor will be nominated.
3. Appoint the Person to Execute the Process.
At this point the court authorizes the executor or appoints an estate administrator to carry out the probate process. If a will exists, the executor will be required to abide by the terms of the will.
4. Post a Probate Bond.
This may be a required step in the process. Posting a bond does take a lot of money, but it’s an important part of the process, and the estate ends up paying it in the end. It ensures that if something goes wrong with the assets for any reason, those who are beneficiaries will still receive their rightful assets.
5. Notify all Creditors and Beneficiaries.
The authorized person will need to find all creditors and beneficiaries to notify them of the person’s passing. After this information is gathered, the authorized person will then know where the debts are in order to pay them after the estate has been valued.
6. Determine Asset Values.
The authorized person will look at the value of all items owned. The Court will appoint a professional appraiser, known as a Probate Referee, to look at everything from real-estate, cars, jewelry, and smaller items like kitchen accessories and furniture. The Probate Referee will then provide a formal Inventory and Appraisal, listing all the assets of the estate and their appraised value.
7. Pay all Debts.
The authorized person will use the valued estate to pay all debts that are owed. They will also be able to use the estate to pay any other needed expenses like funeral expenses, and taxes. This is the part of the process where having an estate lawyer is crucial.
8. Asset Allocation.
Now that the death has been proven to the court, all assets have been valued, and all debts have been paid, the beneficiaries will now receive their asset allocation. This is the step where titles for real estate will be transferred, and jewelry is given. The administrator of the estate will carry out the will in terms of what the will indicates for beneficiaries to receive. If there is no will, the administrator of the estate will distribute the assets of the estate to the decedent’s heirs at law, as approved by the court.
Navigating Probate Court
Probate on average can take six months to a year if there are no complications. Although it is a lengthy process, it is there to ensure that the estate of any person is handled properly and those poised to receive assets get what is rightfully theirs. It can be difficult to navigate the process, but we are here for you. If you are in a situation where you are about to enter the probate process or already in the probate process, you don’t have to do this alone.
Contact us today so we can get through the probate process together.