If you do no estate planning, or leave your estate to your loved ones using a will, everything you own will pass through probate.
Probate in California is where a representative, usually an executor, is appointed by the court to collect and take charge all the decedent’s property, pay any debts or other obligations, then distribute the remainder to appropriate beneficiaries. Probate is necessary when the decedent’s property is valued at $150,000 or more (or $20,000 or more in real estate) and there is no beneficiary designation to the asset.
If the decedent left behind a will, it will govern many aspects of the probate process and how the decedent’s property will be distributed to beneficiaries. If there is no will, the process and ultimate distribution will be governed by California’s law of intestate succession – in which case
the heirs at law will take the decedents property after all debts and expenses have been paid according to who the state statute identifies as the heirs at law. For example, if a decedent was married and had 2 children, the property that was the sole property of the decedent would be divided 1/3 to the surviving spouse and 2/3 to the children (the 2/3 share divided equally to the 2 children).
It is important to note however that the court system in California has a back log of cases in most counties so it can take some time to get a probate successfully prosecuted to the end. Due to recent court closures and budget cuts, the process takes 12-24 months on average depending upon the complexity and issues of the estate. The cost of probate is determined by statute, for both the executor and attorney, based on the gross value of the estate. There are other fees, such as: filing fee to open the probate, publication fees, probate referee fees, and fees to the court for Certified Copies of Letters Testamentary. It is also noteworthy that the fees to the attorney and Executor are calculated on the gross fair market value of the property going through the probate without regard to any debt carried on the property.
The process is expensive, time-consuming and open to the public. The probate court is in control of the process until the estate has been settled and distributed. If you are married and have children, you want to make certain that your surviving family has immediate access to cash to pay for living expenses while your estate is being settled. It is not unusual for the probate courts to freeze assets for weeks or even months while trying to determine the proper disposition of the estate. Your surviving spouse may be forced to apply to the probate court for needed cash to pay current living expenses. You can imagine how stressful this process can be. With proper planning, your assets can pass on to your loved ones without undergoing probate, in a manner that is quick, inexpensive and private. Avoiding this wasteful and often contentious process is a very good reason to have an estate plan.