Doyle Golde Grossman - Family Law Site

Why Do I Want to Avoid Probate?

Probate is the legal process of passing property from a deceased person to their beneficiaries or heirs. Probate is necessary to transfer title to property such as bank accounts, real property, and automobiles which the decedent owned at death. A personal representative, an executor if named in the will or an administrator if appointed by court, will be approved by the court to probate the decedent’s estate. The personal representative’s duties include notifying all creditors of the decedent’s death, filing an inventory and appraisal listing all assets, and the court appointed referee will appraise the assets. The personal representative also must file the decedent’s tax returns and pay any taxes from the estate. Approximately a year after the probate process in initiated, the personal representative will file a final petition for probate along with a final accounting and if the court approves, a final order of probate is entered.

The probate process can be very cumbersome, time consuming, public, and expensive. A properly created estate plan can avoid the process in its entirety and save the decedent’s beneficiaries a great deal of time and money. The probate process generally takes a year to complete so long as the procedures detailed in the paragraph above are properly carried completed. An additional drawback of the probate process is that probate entirely lacks privacy as the filings with the probate court are a matter of public record. Most importantly, the probate process can be very expensive, especially in the case of larger estates.

The probate code provides for a sliding scale for attorney and administrator fees. Probate Code Section 10810 provides that the attorney for the personal representative shall receive fees equal to four percent of the first $100,000 of the estate; three percent on the next $100,000; two percent of the next $800,000; one percent on the next $9,000,000; one-half of one percent on the next $15,000,000; and a reasonable amount to be determined by the court for all amounts above $25,000,000. Probate Code Section 10800 provides that the personal representative is also entitled to fees in the same amount. Additional fees may be awarded for extraordinary work.

The chart below demonstrates the combined attorney and personal representative fees for difference size estates:

A properly drafted and executed estate plan can avoid the probate process. The deceased person’s assets will be in the trust and the successor trustee will have the task of distributing the assets according to the trust’s instructions. This process is referred to as trust administration and although it is not without some cost, it will generally result in substantial savings when compared to the probate process. The trust administration is also carried out in privacy and it is not made public record like a probate. There are no statutory waiting requirements to distribute assets of a trust unlike probate’s requirements. Also, there is no court supervision so the successor trustee does not have to go to court and receive permission before acting.