ESTATE PLANNING: Probate: What it is? When is it necessary? How to avoid it?


Despite the push over the past few decades by estate planning attorneys, CPAs, and financial advisors to urge all individuals with any assets to prepare an estate plan, there is a large number of people who pass away having done no planning. This is unfortunate because by choosing not to plan these individuals are choosing to subject their estates and their family to the probate process. In California, this process is governed by Division 7 of the California Probate Code, §7000-12591.

What is probate?

In its simplest form, probate is the judicial-supervised administration of a deceased person’s estate by an executor or administrator, who are both commonly referred to as the Personal Representative of the Estate. The Personal Representative steps into the shoes of the decedent and has full authority to handle the descendant’s assets in the same way the decedent could have if he/she were still alive. The Court serves as a check on the Personal Representative’s power and acts to protect the interests of the heirs, beneficiaries, and even the creditors. In a probate, the decedent’s will is validated, beneficiaries and heirs are determined, creditors are paid, and the decedent’s property is distributed to the proper individuals.

When is a probate needed?

Generally, a probate is required when an individual dies holding property in their individual name. However, there are some exceptions where the property passes to the designated individuals without the need for the probate process. For example, the following property is not subject to probate administration:

  • Property held in joint tenancy;
  • Property held in a Trust;
  • Proceeds of Life Insurance with designated beneficiaries other than the decedent’s estate;
  • Pension Plan distributions; and
  • Bank Accounts with a pay-on-death designation other than the decedent’s estate.

In addition, there are some items of property that can be transferred without going through the full probate process because the value of the property is less than the statutory limit. Summary procedures are available for:

  • Personal Property where the total value of the decedent’s estate in California is less than $150,000 (Probate Code §13100); and
  • Real Property, where the value is less than $50,000 (Probate Code §13200).

These two summary procedures are much faster and less expensive than full probate administration. However, because of the extremely low-value thresholds, these procedures cannot be relied upon to pass most California estates. Also, one downside is that the beneficiary takes the property subject to claims of the decedent’s creditors.

The probate process?


A probate is opened by the filing of a Petition for Probate. From this initial filing date, it will generally take approximately one year to get to the point of final distribution of the assets. This timeline can be extended significantly by disagreements between the heirs and unexpected issues in the administration such as tax problems.

Cost of probate

Probate can be very expensive for the Estate because attorney fees and Personal Representative fees are calculated based on a statutorily prescribed percentage of the gross value of the estate. The rates are:

  • 4% of the first $100,000 of the gross value of the probate estate.
  • 3% of the next $100,000.
  • 2% of the next $800,000.
  • 1% of the next $9 million.
  • .5% of the next $15 million

Based on this an estate with a gross value of $500,000 would be paying $13,000 in attorney fees and $13,000 to the Personal Representative for their respective services to the estate.

Final Accounting/Petition

Once all of the creditors have been paid, tax returns have been filed, and assets have been collected, the Final Account and Petition for Final Distribution can be prepared. This final petition is a detailed report of every action that the Personal Representative took during the administration and an accounting of every dollar of assets that was administered. The Personal Representative has an obligation to keep accurate records of the administration of the estate and failure to do so could result in a surcharge to the Personal Representative, which will be owed personally.

Avoiding probate

The best way to avoid subjecting your family to the cost and complications of probate is to prepare an estate plan that includes the creation of a revocable trust. The creation of a trust to hold your assets allows you and your family to take advantage of one of the exemptions to the probate process. It is always difficult to deal with the issues of death, but a small investment of time and preparation in advance has a huge benefit for your family down the road.

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