Riverside Probate and Trust Administration
What is Probate?
Probate is the legal process of appointing a person to administer an estate, determining whether a valid Will is in existence, marshalling the assets of the decedent, notifying and paying off creditors, and distributing the remaining assets, if any, to either the beneficiaries designated by the decedent in his or her Will or by the state under the laws of intestacy of the decedent’s state of residency at death.
As part of the initial petition process, a series of publications notifying the public of the fact of the death of the decedent and that a probate of the decedent’s estate is being initiated is published in a Riverside or San Bernardino legal newspaper, as applicable, that is designated for such publication.
If a Will exists, the Will is docketed with the court, a petition for probate of the estate is filed with the court, and the court is requested to approve the appointment of the executor designated under the Will.
If no Will exists, a petition for administration of the estate is filed with the court. The petition nominates an administrator of the estate, usually a relative of the decedent, for approval by the court.
Once approved by the Riverside or San Bernardino County Probate Court, the executor or administrator is given Letters Testamentary or Letters of Administration (“Letters”) as proof of the ability of the executor/administrator to manage the probate process. The executor/administrator marshals the assets in the name of the decedent and files an Inventory and Appraisement with the Probate Court.
Creditors are given four months from the issuance of Letters to file their claims. After a creditor claim is received, the executor/administrator must do one of several options: approve it, deny it, or attempt to negotiate a reduced payoff in full satisfaction of the claim. If the claim is denied, the creditor has ninety days to sue to enforce the claim. After the time to file a creditor claim expires and the other requirements of a probate administration are fulfilled, the executor/administrator can file his or her Final Report with the court, request court approval of the actions taken, and distribute the remainder of the estate as ordered by the court.
Doesn’t Having a Will Avoid Probate?
Unfortunately, no. By using a Will as the central planning document of an estate plan, the person is virtually assuring his or her estate will need to be probated after his or her death.
How Long Does a Probate Take?
Because of time delays between the time of filing documents with the court and the hearing related to the subject matter of those documents (usually 45 to 60 days in the Riverside and San Bernardino County Probate Courts), as well as the mandatory four month creditor claim period, a probate administration will take a minimum of seven months to one year to go from initial filing to approval of the Final Report and distribution of assets to beneficiaries. A typical probate takes a little longer, usually between eighteen months to two years. With the downturn in the real estate market, many probates that consist largely of the residence of the decedent are now taking two or more years to go from start to finish.
How Much Does it Cost to Probate a Riverside Estate?
Probates are expensive. The regular fees paid to the executor and the attorney for the executor, which are commonly referred to as statutory fees, are prescribed by California law. In addition to statutory fees, the executor and attorney for the executor may be entitled to extraordinary fees for services rendered beyond what is normally required in a probate administration (such as sale of a business or real property or the preparation of an estate tax return). In addition to these fees, there are filing fees, publication fees, probate referee (court appointed appraiser) fees, and certification costs. The statutory fees are based on the value of the gross estate. An example of the typical fees and costs for an estate consisting of a residence valued at $300,000 and $200,000 of various bank accounts and investments (for a total value of $500,000) follows:
|Types of Fees and Costs||Amount|
|Statutory Executive Fees||$13,000|
|Statutory Attorney Fees||$13,000|
|Probate Referee Fees||$500|
|Certification and Miscellaneous Fees||$100|
|Typical Total Costs||$27,750|
California statutory attorney and executor fees are calculated based on the gross value, not the net estate. Therefore, the statutory attorneys fees to probate a $500,000 estate with no debt is the same as the statutory probate fees to probate a $500,000 estate with $400,000 of debt, even though there is only $100,000 of net estate available for potential distribution in the latter example.
The statutory attorney and executor fees are calculated as follows: 4% of the first $100,000 of gross value, 3% of the second $100,000 of gross value, 2% of the next $800,000 of value, 1% of the next $9 million of value, 0.5% of the next $15 million in value, and anything over $25 million is negotiable. For example, the fee for a $250,000 would be calculated as follows: (1) the fee for the first $100,000 is $4,000 (4% of $100,000); (2) the fee for the second $100,000 is $3,000; and (3) the fee for the next $50,000 is $1,000 (2% of $50,000) – for a total fee of $8,000. This fee must be approved by the Riverside or San Bernardino County Probate Court, and it is the maximum fee that can be charged. It is possible for the executor to completely waive his or her fee (many do) and for the attorney to agree in advance to reduce his or her statutory compensation.
Issues of Privacy
At our seminars we often hear questions such as, “How it is that the details of Michael Jackson’s, Farrah Fawcett’s, and Walter Cronkite’s Wills and their respective net worth have become public knowledge?” The reason is that the probate process is a public process. The records of the court are available to both creditors and the general public. Anyone can go to the Probate Court for the county where the decedent resided at the time of his or her death and learn details about the assets and debts of the decedent, as well as the intended beneficiaries of those assets after the probate administration is complete.
Privacy is the third most frequent reason, after cost and time delay, stated by our clients and seminar attendees for avoiding probate. The most frequent method used to assure privacy is through the use of trusts, as the terms of trusts are not required to be made public after the death of the individual.
Methods to Avoid Probate
There are many planning vehicles that can be used to avoid a probate administration. There are advantages and disadvantages to each of these strategies. You can learn more about all of these strategies by attending one of our free estate planning seminars or by scheduling a free consultation with one of our law firm’s estate planning attorneys. Several alternatives available are as follows:
- Joint Tenancy
- Custodial Accounts
- Payable on Death / Transfer on Death / In Trust For Accounts
- Beneficiary Designation
- Revocable Living Trusts
- Various types of Irrevocable Trusts
Contact us online or call Riverside probate attorney Dennis M. Sandoval at 951-787-7711 to schedule a free consultation or make a reservation to attend one of our estate planning seminars to learn more about the advantages and disadvantages of these various probate avoidance strategies.
Trust Administration in Riverside County
In many ways, a trust administration is much like the probate of an estate. In the case of a trust, the creator of the trust is known as the trustor, settlor, grantor, or trustmaker. The person in charge of managing the trust is referred to as the trustee. The main difference between a probate administration and a trust administration is that a trust administration does not require court supervision – so the administration process can sometimes be completed more quickly, is not subject to the prying eyes of the public, and can cost considerably less. If the trust is properly funded during the lifetime of the decedent, there is no need for a marshalling of the assets, as the assets are already titled in the name of the trust. The Successor Trustee can take over administration of the trust upon the disability or death of the decedent without the approval of the court. If desired, trust assets can be maintained under the umbrella of the trust, providing important divorce protection and creditor protection for the surviving spouse and remainder beneficiaries.