Probate and Trusts
What Is Probate?
The probate court in California serves several purposes. The most typical is called a probate proceeding, which provides for administration of the estates of people who have died. Guardianships, conservatorships and trust matters, however, are also handled by the probate court. This means that the same court which appoints a conservator for an incapacitated individual may, several years later, administer that individual’s estate after death.
What Is a Probate Proceeding?
A probate proceeding is a court-supervised process ensuring the transfer of assets, upon an individual’s death, to the beneficiaries named in his will or if there is no will, to the heirs as set forth in the probate code. It also sets in motion a process which determines the validity of a creditor’s claim against any given estate in a relatively short time.
A probate administration is begun when a petition is filed with the court, usually by the survivor named as executor in a decedent’s will. The will is admitted to probate after notice is given and a hearing takes place, at which time an executor is appointed. If a person dies without a will, or dies “intestate,” his estate is still likely to undergo probate administration, with whomever the court appoints to handle the estate being named as “administrator.” The exception to this would be if an individual’s assets at death do not include real property and are valued at less than $100,000. In this case, the beneficiaries of the will could choose to follow statutory procedure to transfer assets, minus debts and expenses, without a formal, court-administered probate.
What Are the Benefits of Probate?
Probate does have certain advantages. Primarily, it guarantees that a deceased individual’s assets are verified and distributed, under court supervision, as he or she intended. Also, once the statutory period for examining and satisfying creditor claims passes, (usually four months after an executor is named), it is extremely difficult for creditors or others to claim any interest in the estate. As a result, probating an estate decreases the likelihood that a deceased professional (a doctor, accountant or attorney, for instance) will be sued posthumously. The most obvious benefit, of course, is the assurance that all the actions and accountings of the executor will be reviewed and approved by the probate court.
What Are the Drawbacks of Probate?
Many people seek to avoid probate, and they have valid reasons for doing so. Some individuals are concerned about lack of privacy, due to the fact that the net worth of a probated estate becomes public record, as does the entire estate plan. In a number of cases, time becomes a negative factor as well. Normally, a formal probate takes six months to a year; however, probate actions can sometimes extend to several years or even decades, though this is extremely rare. In general, distributions can be made more quickly pursuant to a living trust. Additionally, the expenses incurred in probate are generally higher than they would have been to complete a trust administration under a living trust.
What Are the Main Stages Involved in the Process of Probating a Decedent’s Estate?
The personal representative (executor or administrator) or his attorney prepares and files a Petition for Probate.
The probate lawyer (or the personal representative, if he/she is unrepresented), sends notice by mail of the death and probate hearing to everyone named in the decedent’s will, where one exists. All legal heirs of the decedent must be noticed as well. This notice must also be published in the newspaper so creditors are aware of the hearing. Notice gives everyone involved a chance to object to either the appointment of a certain executor, the admittance of a particular will, or both.
The hearing will usually occur several weeks after the filing of the matter. Its purpose is to make a judgment as to whether the will is valid, as well as to appoint the personal representative. In some instances, those who witnessed the will are asked by the court to sign a declaration to that effect. In the absence of objections, the court approves the petition and appoints the personal representative.
It is the duty of the personal representative to identify, take control of, and administer the probate assets until all debts are satisfied and income tax returns are filed. Generally, it takes about a year to discharge this responsibility. In some cases, depending upon the terms of the will (assuming there is one), the personal representative may need to liquidate real estate, securities or other property. For instance, if cash gifts are provided for in the will, but the estate is composed mainly of valuable art work, the art may be appraised and placed on the market in order to accumulate the cash necessary for distribution. If unpaid debts exist, the personal representative may sell estate property to satisfy them.
Once debts and taxes are paid, a report is filed with the court by the personal representative. All income received and every payment made on behalf of the state must be accounted for in detail. The judge will then authorize the division of the remaining property among those mentioned in the will, and the personal representative will ensure that such division is completed as ordered.