Probate is the court process by which a Will is proved valid or invalid and the legal process whereby, whether there is a will or not, the estate of a decedent is administered and distributed to designated beneficiaries in the will or the decedent’s heirs if there is no will.
If there is a will or the decedent left an estate greater than a statutory minimum, the estate has to be administered and distributed under Court supervision.
If there is a trust that owns all the property and has provisions for administering and distributing the estate, probate is not required.
Losing a loved one is never an easy thing, and if that person hasn’t planned ahead it can be very difficult for the family to locate assets and pay bills not to mention deciding about the distribution of the assets.
If the decedent hasn’t provided anyone with a copy of his will or trust you should search his home, and if possible, his place of business, to locate important papers. In addition to his estate plan (the will or trust), you want to locate information regarding pre-arranged burial or a cemetery plot, insurance policies, mortgages, utilities, credit cards, and any other potential debts. You should also look for information on bank accounts and possibly a safe-deposit box, which may contain the estate plan. This article is written with the assumption that there is no trust, and there may or may not be a will.
Executor or Administrator?
If there is a will it normally nominates one or more persons to act as the Executor to administer the probate estate. Those persons may choose to take on that responsibility, or they may not. If one of the nominated Executors does decide to accept the responsibility, the original will and all documentation and assets should be delivered to that person. If there is no will, or if the nominated persons decline, the person handling the estate is called the Administrator, but their roles are identical.
Attorneys and Fees
The nominated Executor/Administrator most likely will want to retain an attorney, because navigating through Probate is a technical process which requires experience. Both the attorney and the Executor/Administrator are entitled to compensation from the estate, which they will receive at the end, after the court authorizes it. Fees are fixed by the Court and are based on the size of the estate plus any extraordinary tasks the attorney has to undertake. The statutory fees based on the size of the estate are calculated as follows:
- 4% of the first $100,000.00
- 3% of the next $100,000.00
- 2% of the next $800,000.00
- 1% of the next $9,000,000.00
The Executor/Administrator may need to advance money for the court filing fee, but will be entitled to reimbursement at a later date.
Initial Filing of Petition for Probate
Once the attorney is retained, he will prepare a Petition for Probate, listing the estimated value of the estate and all of the decedent’s heirs, and beneficiaries under the will, if there is one. If there is a will the original will be filed with the court in the county where the decedent had lived, and a copy will be attached to the Petition for Probate. Once the Petition for Probate is filed with the court and a hearing date is set, the attorney will arrange for a newspaper publication in the city where the decedent lived, and will serve a copy of the Petition and a Notice of Hearing on all heirs and beneficiaries, and nominated Executors if any. If the paperwork is submitted properly the Petition should be approved at the first hearing and the Executor/Administrator then is authorized to administer the estate. The Executor/Administrator will obtain certified copies of a document called Letters from the court, which will entitle them to obtain the decedent’s financial information and to take possession of his assets.
Notice of Administration needs to be given to all potential creditors, so they have the opportunity to submit a claim if they believe they are owed money. If the Executor/Administrator paid for the funeral, or is owed money by the decedent, he may need to file a creditor’s claim too, and the court will have to determine whether the Executor/Administrator should be paid. He should discuss this with his attorney.
The Hearing on Petition for Probate
Frequently, the petition can be approved on the first hearing without the need to appear in court. Sometimes the court has questions, which they post on their website ahead of the hearing. It may be possible to prepare a response to the questions in time for the hearing, and if not it will be necessary to continue the hearing to address the questions. Normally, the attorney appears and the Executor/Administrator does not need to appear in court.
Preserving and Administering the Assets
The Executor/Administrator needs to open a bank account in his name as Executor/Administrator of the Estate of the decedent, and place the estate’s assets into that account. He should never put estate assets into his personal account, or vice versa. Estate expenses should always be paid with checks from the estate account, and receipts should always be kept. Never pay personal expenses with estate funds or give estate assets to others. If the Executor/Administrator is ever uncertain about whether he should pay something he should always check with his attorney, as some things should not be paid without prior court authorization.
The Executor/Administrator will need to make sure the estate’s assets are insured, and that taxes and loan payments are made. He should never allow anyone to use the decedent’s vehicles.
The attorney will request a list of the decedent’s assets and some information regarding them, so he can have the court-appointed probate referee appraise the items on a form called Inventory and Appraisal. This needs to be done shortly after appointment.
At some point the Executor/Administrator will need to decide with the attorney whether real property or other assets will be sold, or ultimately distributed to the heirs or beneficiaries. If there is no money to make mortgage or loan payments this should happen sooner rather than later. If real property is in default and in danger of being lost in foreclosure the attorney can get a court order to stop foreclosure long enough to sell the property. Tax returns will need to be filed on behalf of the estate.
Shortly after appointment, the Executor/Administrator must serve notice on all known or reasonably ascertainable creditors of the decedent by sending a notice of administration form, and a creditor’s claim form for the creditor to complete and return with proof of the claim. The creditor has a short time frame to serve the claim on the Executor/Administrator and to file it with the court. Thereafter, the Executor/Administrator must decide whether the claim should be allowed in full, denied, or partially allowed, and an allowance or rejection of claim form must be served on the creditor and filed with the court. If the claim is denied and the creditor wishes to pursue the matter he must file a civil lawsuit against the Executor/Administrator within ninety days of rejection, or the claim is barred. No creditor may pursue a claim against the estate unless he has first filed a creditor’s claim, and the claim must be brought within one year of the decedent’s death or it is barred by the statute of limitations.
Notice must also be given to the Department of Health Care Services, the director of Victim Compensation and Government Claims Board and the Franchise Tax Board.
If there are insufficient assets to pay all of the creditors the California Probate Code sets out which classes of claims receive priority and how partial payment is to be made. Costs of administration, including the Executor/Administrator’s compensation and attorney fees, have priority over all other creditors.
Final Account and Report and Petition for Distribution
After the time to file creditor claims has passed, and the Inventory has been filed and assets sold (if they are going to be sold), the Executor/Administrator will need to work with the attorney to either prepare a final account, or a waiver of account if the heirs and beneficiaries want to waive an accounting. Part of that account (or waiver of account) will be a petition requesting compensation for the Executor/Administrator and the attorney, and seeking an order to distribute the estate.
Once the court has approved the account (or waiver of account), and an order has been signed by the court, the Executor/Administrator will make the required payments and distributions, and file receipts and an Order for Discharge with the court, and the process is complete. If everything goes smoothly and there is no real property to sell it could be completed in about six month.
Probate is not the lengthy, expensive process some make it out to be, and if you retain an experienced probate attorney, and follow his advice, it can be a painless process.
Ms. Stevenson learned the probate process while working as a Probate Examiner for the Orange County Superior Court, reviewing the documents that had been filed and advising the Judge regarding their sufficiency. Thereafter, she has spent most of the past twenty-three years practicing in the probate filed. She has represented many Executors and Administrators in the administration process, and has assisted heirs who have had concerns about whether that process has been handled correctly. She also has handled other types of matters heard in the probate court, including conservatorships, guardianships, trust administration, and litigation in connection with disputes in these various actions.
Note that this is a simplified summary of the process and is not intended to include all possible steps or responsibilities one takes on as Executor or Administrator, and it is always recommended that the advice of legal counsel experience in the Probate field be sought.