No one looks forward to dealing with legal matters after a loved one passes, and most people do not relish the idea of planning for their own deaths. Unfortunately, that’s the reality of the situation for everyone, and those who want to help minimize the grief and pain experienced by their family members and close friends need to take steps to make the transition of their assets as easy and as smooth as possible. Failing to put a proper plan together for an estate can lead to that estate winding up in probate court. Avoiding probate court is almost always a better option if possible, for reasons we’ll discuss below.
Kam Law Firm has been helping clients avoid probate court in California for years, and as a result we’ve helped families save a lot of time, expense and unneeded stress. Ideas for how to avoid probate in California can differ with each specific situation, but the bottom line is that everyone should have their estate reviewed by a probate attorney in order to plan for the best possible outcome. We’ll start with what probate is, why it should be avoided and then provide some general examples for how to avoid probate court. If you’re ready to protect your estate from this process and make it easier on your beneficiaries, contact Kam Law Firm today for a complimentary initial consultation.
What Is Probate?
Probate is a proceeding that occurs in court. Probate court oversees the administering of a will and estates that have no will. It is a common misconception that a will avoids probate. It does not. Only a trust avoids probate. The purpose of this process is to legally pass assets from the person who died, known in legal terms as the decedent, to the people he or she wanted to receive the assets, known as the beneficiaries. Unless there are problems with the will or challenges filed by relevant parties, the probate court will generally carry out the wishes of the decedent and complete the process of passing title of the assets to the beneficiaries.
Why Should People Avoid Probate If Possible?
People spend time figuring out how to avoid probate because it is time-consuming and potentially expensive. It can take one to two years or longer for an estate to be administered in probate court in California, which means that during this time, the beneficiaries are waiting for their inheritance. In addition, there are fees in California set by law that are paid by an estate that goes through the probate process.
Those fees are paid both to the probate attorney handling the estate and the executor, or the person named as the one who’s responsible for actually administering the estate. Either party can decline the fees, but they are calculated on the gross amount of the estate involved. That means that any existing debts are not deducted from the total value of the estate. The fees are as follows:
|Estate Value||Fee Rate||Executor Fee||Attorney Fee||Total Fee|
|Up to $100,000||4%||$4,000||$4,000||$8,000|
|$100,001 – $200,000||3%||$7,000||$7,000||$14,000|
|$200,001 – $1 million||2%||$23,000||$23,000||$46,000|
|$1,000,001 – $10 million||1%||$113,000||$113,000||$226,000|
|$10,000,001 – $25 million||0.5%||$188,000||$188,000||$376,000|
|Over $25 million||Reasonable Fee|
These fees assume that nothing unexpected our out-of-the-ordinary happens. If such a circumstance does arise, the executor and the attorney could be in line for additional fees for handling those matters. For example, the sale of real property is considered an extraordinary fee and the attorney and executor time for selling real property is subject to additional hourly fees.
Therefore, it should be clear as to why avoiding probate is a good idea for every family. It adds time and expense to the situation, only creating stress and the potential for confusion and even conflicts.
Ideas for Avoiding Probate in California
Fortunately, there are ways in which estates can legally avoid probate in California. Below are a few examples that can accomplish this goal in certain situations:
- A Living Trust – People can place their assets in a living trust before they die. The terms of the Trust then control administration and distribution of the assets, rather than the court. The living trust is managed by a trustee, and that trustee works for the benefit of that trust. Ultimately, the trustee can distribute those assets to the beneficiaries named in the trust instrument. If done correctly, this approach will avoid probate court in California.
- Certain Retirement and Bank Accounts – If someone sets up retirement and/or bank accounts that designate pay-on-death beneficiaries, these assets can avoid probate. A person who sets up such accounts needs to fill out forms with the institution or institutions holding these assets, and that person maintains control of those assets during his or her lifetime.
- Certain Types of Real Property – If a person holds real property in ownership, he or she can decide to hold that property as a joint tenancy with a right of survivorship. When the person dies, that property passes to the other joint “tenant” or owner. This can occur by way of community property with a surviving spouse. However, this real property should still be dealt with in a living trust in order to minimize the chance for a problem or other expenses to arise.
How Kam Law Firm Can Help
Avoiding probate is always a good idea for those with assets that they want to pass on to their loved ones when they pass away. As mentioned above, no two estates are ever exactly alike, and circumstances can change as time move forward. The best way to make sure that your estate is properly planned and managed is to seek the help of a California probate attorney who can help you figure out how to avoid probate in California. Regardless of your age or health status, it’s never too early to get started on this process. If you’re ready to plan for your family’s future, contact Kam Law Firm today to schedule a complimentary review of your situation.