Probate is the legal process that occurs after someone passes away, during which their assets and debts are evaluated and distributed according to their will or state law. The probate process and laws associated with it vary from state to state, so it’s crucial to have a basic understanding of them in your state.
If you’re in California and are trying to navigate the probate process, you must know about probate in the state alongside some of the laws that govern it. Below are 11 essential points about probate in California that you should know.
- Probate Is Essential for Certain Types of Assets
In California, probate is essential for any assets solely owned by the deceased person and have no beneficiary designation. It incorporates assets like bank accounts, real estate, and personal property. However, if the dead had assets jointly owned with someone else, those assets will typically pass directly to the joint owner outside of probate.
- California Estate Tax Exemption
The estate tax exemption is $12.92 million per person in early 2023. It means that if someone passes away with an estate valued at less than $12.92 million, their estate will not owe any state or federal estate taxes.
- California Has a Simplified Probate Process
So, how much does an estate have to be worth to go to probate in California? The state has a simplified probate process for small estates valued at less than $166,250. It allows anyone to settle the estate without carrying out a full probate hearing.
The process involves filing a form called a “Small Estate Affidavit” with the probate court, alongside a certified copy of the death certificate and a list of the estate’s assets and debts. The court will then issue an order to allow the distribution of the estate to the appropriate beneficiaries. It can be much quicker and less expensive than a full probate hearing.
- The Probate Can Have High Costs
One of the main reasons people try to avoid probate is that it can be expensive. In California, the cost of probate can vary depending on the estate size, but it can run into thousands of dollars.
There are additional costs that make probate expensive, such as court fees, attorney’s fees, appraiser fees, and other expenses associated with the probate process. In California, you have to pay the executor of the estate a fee of 4% of the first $100,000 of the estate, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9 million, and 0.5% of the next $15 million. These costs can include court fees, attorney’s fees, appraiser fees, and other expenses associated with the probate process.
- California Law Allows for a “No-Contest” Clause in Wills
A “no-contest” clause is a provision in a will that disinherits a beneficiary if they challenge the validity of the probate. In California, no-contest clauses are generally enforceable as long as they meet specified requirements. It can ensure the fulfillment of one’s wishes, even after death.
- Probate Can Take a Long Time in California
Probate in California can take 8 months to several years to complete. The duration depends on the case’s complexity and whether there are any disputes among the beneficiaries or heirs. The court locks the assets in the estate during this period and doesn’t allow their distribution to the beneficiaries or heirs. That may cause a delay in distributing assets to beneficiaries and may result in additional expenses. Hence, it is essential to have a plan in place to ensure that your loved ones are taken care of during this process.
- California Law Requires Notice to Creditors
When someone passes away, their creditors have a right to get notified so that they can make a claim against the estate for any debts they owe. In California, the estate executor must provide notice to the deceased person’s creditors, which gives them a certain amount of time to file a claim against the estate.
- California Allows for Informal Probate
California also allows for probate proceedings that are less formal than a full probate hearing. In an informal probate proceeding, the court appoints a personal representative to manage the estate, but there is no formal hearing or court supervision. It can be a faster and less expensive option than a full probate hearing. However, informal probate is not available in all cases, and it may not be appropriate for complex estates or situations where there is a risk of disputes between heirs.
- California Law Allows for Probate Mediation
California law allows for probate mediation if there are disputes among the beneficiaries or heirs. It is a process where a neutral third party helps the parties agree outside of court. It can be crucial for resolving disputes and avoiding the time and expense of a formal court proceeding.
- California Allows for “Holographic” Wills
In California, a “holographic” will is when one writes one’s own will with pen and paper. The holographic wills are generally valid in California as long as they meet specific requirements, such as the entire will being in the deceased person’s handwriting, and are signed and dated by them.
- There are Time Limits for Filing a Probate Petition
There are time limits for filing a probate petition in California. One should file a petition within 30 days of the executor or administrator receiving notice of the deceased person’s death. If you don’t file the petition within this time frame, the court may appoint someone else as the executor or administrator.
Probate can be a complex and time-consuming process in California. It can also be expensive, and not all assets are subject to probate. Having a will does not necessarily avoid probate, and the process can take considerable time. However, one can avoid probate through proper estate planning. California law also requires notice to creditors and allows non-estate clauses, informal probate, probate mediation, and holographic wills. Thus, you must work with an experienced probate attorney who can guide you through the process and help you minimize costs and delays.