If a person executes only a will or fails create Estate Planning documents, then at their death their estate will be subject to probate. Probate is a court procedure that oversees payment of debts and transfer of assets following an individual’s death.
Probate is an option you do not want to take because of the costs and delays associated with the it. Probate fees (payable to the attorney and the executor) are set by statute. They are based on the gross fair market value of the estate, not on the complexity of the case. Further there are additional fees if the attorney or executor prepares or files tax returns, sells real estate, or does other extraordinary work on behalf of the estate. Also, the probate process takes a lot of time, generally lasting between nine months and two years from a decedent’s death.
Statutory Probate Fees
|Size of Estate||Total Compensation|
|$0||4% of amount|
|$100,000||$4,000 + 3% of amount above $100,000|
|$200,000||$7,000 + 2% of amount above $200,000|
|$1 million||$23,000 + 1% of amount above $1 million|
|$10 million||$113,000 + ½% of amount above $10 million|
|$25 million||$188,000 + reasonable amount|
Probate costs include filing fees, newspaper publication fees, costs for certified copies, and probate referees (appraisers), and can easily exceed $1,000.
In most cases, there is no probate if a person dies and leaves his assets to his surviving spouse. Therefore, the pitfalls of probate occur at the death of a single person (including the death of a now-single surviving spouse), when the assets pass to his children or other heirs.
In addition to trust assets, certain other types of assets are not typically subject to probate because, under California law, the assets automatically are transferred to the designated beneficiary on the account. These types of assets include:
Although probate can be avoided by adding a joint tenant to your assets, there may be unintended income or gift tax consequences associated with the addition. It is always advisable to speak with an attorney before changing the title or beneficiary to your assets.
If you have any questions, contact The Singh Law Firm, Fremont, California Estate Planning Attorneys. We are more than happy to discuss all the Estate Planning options available to you.