Probate is a court proceeding that determines who receives the assets of a decedent and gives creditors an opportunity to make claims against the estate for the debts of the decedent. Probate can be avoided if the assets in the name of the decedent alone without a beneficiary, a joint tenant, or a trust total less than $166,250. A full blown probate can even be avoided on an interest in real estate if it totals less than $166,250 in value. See California Probate Code sections 13000 through 13660 for more details.
If probate cannot be avoided (which is a shame because having a properly funded living trust so easily avoids probate), a petition must be filed with the probate court in which the decedent had his or her primary residence. A filing fee of at least $465 must be paid. The court will set a date for hearing the probate petition. Notice of the initial probate hearing must be published in a newspaper with general circulation in the area of residence of the decedent. The petitioner must send notice of the hearing to anyone who may have the right to get some part of the estate, plus any family members who receive part of the estate under the law if the Will did not exclude them. In addition, anyone who wants to be kept informed about the probate may file a Request for Special Notice ( Form DE-154). (All references to forms are to those created by the California Judicial Council.) The filing of such a form means that the personal representative must send a copy of any paperwork he or she files with the court to the requesting party.
It may seem a bit strange but the petitioner CANNOT mail the initial notice of hearing or any other notice. It must be mailed by any other adult who is not a party to the case.
First, the court will determine whether or not there is a valid Will of the decedent. If there is a valid Will, it will determine the beneficiaries of the estate. Most times the Will appoints an executor, also called the personal representative of the estate, the person in charge. On occasion a Will states who receives the estate but fails to appoint an executor. In that case, the personal representative is called the “administrator with Will annexed.”
If there is no valid Will or the Will fails to appoint an executor, the court will name an administrator as the personal representative. The court will require the personal representative to “post a bond”, meaning get a company to guarantee to make good if he or she steals the money. The court can waive bond, especially if the Will waives bond. However, the court will still likely require a bond if the personal representative lives outside of the State of California.
The court will oversee the work of the personal representative . The entire case will take at a minimum 6 ½ months to 18 months, or even longer.
The key moment in time in a probate is the date the court issues “Letters” to the personal representative. Letters are not issued until after the court signs the order appointing the personal representative. That date starts a four month clock ticking only during which creditors may make claims against the estate. The final probate order discussed below cannot be issued until after that four month period expires. Such period will be extended by law if the personal representative fails to send notice of the probate to a known creditor. That formal notice is called formal notice to creditors the Notice of Administration to Creditors (Form DE-157).
The personal representative will then use the Letters to get the assets of the decedent transferred into the name of the personal representative as executor/administrator of the estate. The personal representative must file an Inventory and Appraisal (Form DE-160) with the court. The personal representative usually will need to contact a probate referee appointed by the court to value the nonmonetary assets. Also, very important is to notify the County Assessor of the death of the decedent.
The personal representative needs to give notice to the Franchise Tax Board and certain other individuals and agencies. These notices should go out fairly quickly after the issuance of the Letters, again the true start of the probate. Especially important is a form to take advantage of the parent to child exception of Proposition 58 to the Proposition 13 change of ownership rules regarding property taxes.
The personal representative files a final income tax return for the decedent’s year of death. The personal representative will like need to file an income tax return also for the estate, especially if it sells any real estate.
After the four months have expired from the issuing of the Letters, the personal representative files a final report to the court on how the estate has been handled, in particular that the proper notices have been filed. This report also requests the court to approve to whom the estate will be distributed. This report is a final accounting of the assets, income and expenses of the estate; however, many times the beneficiaries will waive this accounting requirement. The report is scheduled for hearing so the judge can review the report and the proposed distribution. The judge needs to be satisfied that all is proper. The report also includes a request for attorneys fees. Those fees are usually quite large and so a great reason for having a living trust and avoiding a probate. The personal representative can take the same amount as compensation for his or her work, but many waive that compensation.
After the court approves the final distribution, the personal representative distributes out the estate. He or she then files with the court any required final receipts to show that everyone received their property from the estate, and the court discharges the personal representative from his or her duties.