When someone dies with only a will or without a will, their estate and debts are settled through probate. The legal process of “proving” or validating the will in court can be an unpleasant experience for survivors during their time of grief. It can also have a lasting negative impact on both the estate and the family, due to:
In California, probate is expensive and involves statutory fees that are non-negotiable. For the first $100,000 of the gross value in the estate, the fee is four (4) percent, amounting to $4,000. Three (3) percent is taken from the next $100,000, and two (2) percent from the following $100,000–$800,000 of the gross estate value.
For an $800,000 estate, for example, the legal fees will be about $19,000—not including court costs such as filing fees and appraisals, which can add to a few thousand dollars more. Personal representatives and executors of the estate are also entitled to statutory fees. Using the example above, an estate with a gross value of $800,000 is subject to $19,000 in attorney fees and another $19,000 in personal representative or executor fees.
Special circumstances can also incur additional costs and legal fees. Many cases require a bond to be paid by the personal representative. Thus, it is possible that surviving family members will need to liquidate or borrow against assets to pay the probate fees.
Probate cases may conclude within a year. Many can take up to two years or more because every step requires court oversight. Delays can arise with improper representation, disputing beneficiaries, and non-liquid assets such as collectibles, intellectual property, and complex business interests.
During probate, the beneficiaries are not able to access funds when they might need it. This can create financial issues regarding burial costs and ongoing maintenance of the estate such as paying the bills.
Essentially, the court monitors the estate until probate is complete. For example, if beneficiaries wish to sell the estate property, court oversight may be required. Additionally, if there is no valid will, the court will follow the state’s intestate rules. This means that the heirs of the estate are predetermined by statute and can lead to estranged family members receiving the estate.
Probate takes place in state court, where documents are public record. These documents include details about heirs or beneficiaries, property values, and creditor claims. In some probate cases, for example, the home is auctioned and sold in the courthouse.
The estate planning attorneys at the Law Offices of Belgum, Fry & Van Allen can help you avoid probate by establishing a living trust. The trust is tailored to your needs and can be updated or revoked as needed. If you have any questions about probate, please, give us a call.Tags: probate