Probate Process

Probate Process (California basic- may vary considerably in other states)

Errold F. Moody Jr.

Master of Science in Financial Planning, Life and Disability Insurance Analyst

WWW.EFMOODY.COM

1. A will is written

2. An executor is appointed.

3. Person dies

4. Family notifies the executor

5. Executor takes steps to secure deceased's property (notifies banks, employers, etc. of the death; if necessary has utilities turned off, cancels newspapers, seals the house, etc.). Executor does not pay any debts or distribute any property at this time

6. Executor may be involved with making funeral arrangements

7 A petition for probate is prepared. (The executor's attorney prepares the petition, which is filed with a death certificate and the original copy of the will.) At that time, the executor secures a federal tax identification number for the estate.

8. Newspaper notice. Mandatory with probate. This tells people of the death and that the will is being probated and that creditors have a fixed amount of time (usually no more than four months) to come forward or be forever barred.

9. Mail notices to heirs and beneficiaries. Executor must send copy of the petition for probate and a copy of the will to every beneficiary or heir.

10. Hearing for probate. Usually about six weeks after probates is filed.

At the hearing the judge will decide on the validity of the will. If valid, the will names the beneficiaries who will take the estate after creditors and taxes are paid. At the hearing, the judge signs "letters testamentary" allowing the executor to sell or change title to the deceased's property.

11. Inventory the estate. Hire an appraiser. File all claims for the benefits due the estate (these include fraternal or lodge benefits, social security, etc.).

12. File inventory with court

13. Pay creditors. Creditors are usually assembled and paid one month after time limit is exhausted (therefore at least five months after probate process begins). If there is not enough money in the estate to satisfy all creditors, the are paid in the following order:

a. Executor's fee if any

b. Attorney's fee

c. Reasonable funeral expenses

d. Family allowance (usually a fixed sum of money for maintaining the deceased's spouse and dependent children while will is being probated.)

e. Homestead allowance (generally an amount needed to pay the normal upkeep of the home while the will is being probated.

f. Exempt property- a surviving spouse or children have a right to a fixed dollar value (varies from state to state) of deceased's tangible property, such as the car, furniture, paintings, etc.

g. Taxes (fiduciary tax on estate's income)

h. All outstanding medical expenses

i. All other claims

14. Pay state inheritance tax

15. Pay federal estate tax, if any. This is due nine months after death.

16. Petition for distribution of the estate. Executor present final accounting to court.

17. Final notice in newspaper announcing closing of probate and distribution to heirs and beneficiaries.

18. Final Hearing- judge reviews executor's actions and closes probate.

Total elapsed time: at least nine months.

PROBATE (Shortened version)

Time

A. File Petitions 3- 4 weeks

1. Admit will to probate

2. Appoint Executor

B. File Notice to Creditor 4 months

C. File Inventory and Appraisement 1 week to 1 year

D. File account and Order for 3- 4 weeks distribution

E. Distribute- file receipts 1- 4 weeks

F. File Closing Petition 3- 4 weeks

MINIMUM TIME 8- 12 months

Probate is not necessarily bad, particularly for small estates. And many states have simplified procedures. Do NOT simply buy a living trust to avoid probate without doing some homework first.

Probate Fees (California)

Statutory amounts to be levied by probate attorney and the executor- though they may be negotiated. But negotiating fees after a loved one has died in post mortem planning- a bad idea.

4% on first $15,000

3% on next $85,000

2% on next $900,000

1% on anything over $100,000,000

PLUS extraordinary fees

Average in California is 8- 10% of estate

Asset Size Irrespective of Loans Attorney Fees Executor Fee

$100,000 Not assessed for small estates Same

$200,000 $5,150 5,150

$300,000 $7,150 7,150

$500,000 $11,150 11,150

$750,000 $16,150 16,150

$1,000,000 $21,150 21,150

$3,000,000 $41,150 41,150

$5,000,000 $61,150 61,150

BACK TO HOME

Asset Size Irrespective of Loans	Attorney Fees	Executor Fee
$100,000	Not assessed for small estates	Same
$200,000	$5,150	5,150
$300,000	$7,150	7,150
$500,000	$11,150	11,150
$750,000	$16,150	16,150
$1,000,000	$21,150	21,150
$3,000,000	$41,150	41,150
$5,000,000	$61,150	61,150