Unfortunately, yes, California probates are slow. In general, the probate process in California takes 12-16 months and can be longer. California requires a mandatory four-month creditor period after Letters of Administration are issued. This contributes to the length of the administration. But, the bigger issue is the understaffed courts in most counties in California. The start and close of the administration require a hearing date, and unfortunately, the calendars are full. This means hearings are often scheduled for two to three months after the documents are filed. Plus, if the court has any issues or questions with the petition, a continuance can often extend the administration for another one to two months.
I’ve Heard California Probate Is Difficult And Expensive. Is It True?
California probate can be difficult. The probate code requires many precise processes and procedures. Plus, each county operates under its own local rules, which are not always easy to find or understand. California probate can also be expensive. On average, the cost of administering the estate in California is 4.5% to 5.5% of the estate’s gross value. The cost includes the compensation paid to attorneys, compensation paid to the personal representative, court costs, and bond premiums if they are required. And again, the percentage is based on the gross value, not the net value. This means it is not reduced by any debts, such as a mortgage. So, for example, if a probate estate consists of a home valued at $500,000 with a mortgage of $225,000 and a bank account with $25,000 in it, the average cost of probating this estate is 4.5% to 5% of $525,000 or approximately $23,625 to $28,875.
Is It Worth The Investment To Set Up An Estate Plan For My Heirs To Be Spared Of The Expense And Hassle Of Probate In California?
Establishing a properly executed estate plan is a gift to your heirs. Though it is an upfront cost to you, you save them from significantly higher probate administration fees and the frustration and hassle of a lengthy administration. A complete estate plan may cost you several thousand dollars, but a probate administration may cost between four and ten times more.
Does Probate Sometimes Make The Most Sense In California?
There are circumstances in which a probate administration may make the most sense in California. One scenario in which probate makes sense is if you anticipate significant conflict between beneficiaries and/or issues from people you’ve disinherited. The Probate Court oversees all actions taken during an administration. This helps reduce the chance of any individual acting improperly and gives final sign off to a neutral party. By comparison, if assets transfer via a trust and outside of probate, there is no oversight. Another scenario in which probate makes sense is if you have significant debt. Probate has a limited creditor period of four months. If a creditor fails to timely and properly make a claim during this time then they are barred from collecting on the debt. By comparison, the statute of limitations for creditors if no probate is initiated is one year.
If Someone Has A Lot Of Debt At The Time Of Death In California, Can Probate Be Helpful In Limiting The Amount OF Time The Creditor Has To Make Claims Against The Estate?
Probate can help reduce a decedent’s debts by limiting the time a creditor has to make a claim against the estate. A creditor has four months from the date Letters of Administration are filed or 60 days after the creditor has received a notice of the administration, whichever occurs last. If a creditor does not properly file a claim during this time, they are barred from filing. Surprisingly, many creditors take no action within the creditor window. By comparison, the statute of limitations for creditors if no probate is initiated is one year.
What Happens If There Is Not Enough To Pay All Of The Deceased Person’s Creditors In California?
If an estate does not have enough assets to pay all of the decedent’s creditors, the estate is considered insolvent. When an estate is insolvent, expenses to creditors are paid in order of priority. The order is:
- Tax Debts
- Expenses of Administration, such as compensation to the attorney and personal representative, courts costs and bond premiums.
- Secured debts such as mortgages and other liens.
- Funeral Expenses
- Expenses of a last illness
- Family Allowance
- Wage Claims
- Unsecured General Debts
Many creditors fall into the category of unsecured general debts. Each level of priority must be paid in full before the next level can be paid. If there is not enough money to pay all expenses and creditors on a specific priority level, then the payments to the creditors on that level are made pro-rata. It is possible that a creditor with a large unsecured debt will not be paid at all.
Do Beneficiaries Have A Right To See The Will?
Beneficiaries have a right to see the will. Within 30 days of receiving knowledge of a person’s death, the person in possession of the will must lodge the original will in a county where the estate may be administered. Any person may then view the will either in person or online if the county offers online services.
For more information on Probate Process In The State Of California, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (415) 529-4541 today.