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Probate / Trust Administration

When a loved one passes away, his or her estate often goes through a court-managed process called probate or estate administration where the assets of the deceased are managed and distributed.  The length of time needed to complete the probate of an estate depends on the size and complexity of the estate and the local rules and schedule of the probate court. 

Every probate estate is unique, but most involve the following steps:

  • Filing of a petition with the proper probate court.
  • Notice to heirs under the Will or to statutory heirs (if no Will exists).
  • Petition to appoint Executor (in the case of a Will) or Administrator for the estate.
  • Inventory and appraisal of estate assets by Executor/Administrator.
  • Payment of estate debts to rightful creditors.
  • Sale of estate assets. 
  • Payment of estate taxes, if applicable.
  • Final distribution of assets to heirs.

Trust Administration

However, if your loved one owned his or her assets through a well-drafted and properly-funded living trust, no court-managed administration should be necessary.  The successor trustee will administer the distribution of the deceased's assets to the beneficiaries according to the terms of the trust document.  This process will ordinarily take less time than a court-supervised probate, and the expenses of the trust administration should be considerably less than probate expenses.

The successor trustee owes a fiduciary duty to the beneficiaries of the trust, and must fulfill his or her duties with the highest degree of integrity.  Because the successor trustee can be held liable for mismanagement of trust assets under his or her control, it is advised that he or she retain an attorney and an accountant to advise and assist with his or her duties. 

Probate can be expensive and take longer to complete than Trust Administration

The cost and duration of probate can vary substantially depending on a number of factors such as the value and complexity of the estate, the existence of a Will and the location of real property owned by the estate.  Will contests or disputes with alleged creditors over the debts of the estate can also add significant cost and delay. 

Common expenses of an estate include executors fees, attorneys fees, accounting fees, court fees, appraisal costs, and surety bonds.  California statutory fees for both the attorney and the executor are based the Gross Probate Estate - the total value of the estate before any reductions for debts - as determined by a "probate referee."

Following is the probate fee schedule for "ordinary" services:

Estate Value Statutory Fees
$  100,000 $   4,000
$  200,000 $   7,000
$  300,000 $   9,000
$  400,000 $ 11,000
$  500,000 $ 13,000
$  600,000 $ 15,000
$  700,000 $ 17,000
$  800,000 $ 19,000
$  900,000 $ 21,000
$1,000,000 $ 23,000
$1,500,000 $ 28,000

4% of the first $100,000
3% of the next $100,000
2% of the next $800,000
1% of amounts over $1 million

Most estates are settled though probate in about 12 to 18 months, assuming there is no litigation involved.

FREQUENTLY ASKED QUESTIONS

Does probate administer all property of the deceased?

The court oversees the Probate process through which the Executor or Personal Representative collects the deceased person's assets, pays his or her debts, and then transfers title of the assets to the names of the beneficiaries. 

Certain types of assets that are called “non-probate assets” do not go through probate.  These include:

  • Property in which you own title as “joint tenants with right of survivorship."  Such property passes to the co-owners by operation of law and does not go through probate.
  • Retirement accounts such as IRA and 401(k) accounts where there are designated beneficiaries.
  • Life insurance policies.
  • Bank accounts with “pay on death” (POD) designations or “in trust for” designations.
  • Property owned by a living trust.  Legal title to such property passes to successor trustees without having to go through probate.


Does the Executor/Personal Representative get paid for serving?

Executors/Personal Representatives are reimbursed for all legitimate out-of-pocket expenses incurred in the process of management and distribution of the deceased estate.  In addition, the Executor/Personal Representative is entitled to statutory fees based on the fee schedule above.

The Executor/Personal Representative has to fulfill his or her fiduciary duties on behalf of the estate with the highest degree of integrity and can be held liable for mismanagement of estate assets in his or her care.  It is advised that the Executor/Personal Representative retain an attorney and an accountant to advise and assist with his or her duties.

What happens if someone objects to the Will?

An objection to a Will, also known as a “Will contest” is a fairly common occurrence during the probate proceedings and can be incredibly costly to litigate.

In order to contest a Will, one has to have legal “standing” to raise objections.  This usually occurs when, for example, children are to receive disproportionate shares under the Will, or when distribution schemes change from a prior Will to a later Will.  In addition to disputes over the tangible distributions, Will contests can be a quarrel over the person designated to serve as Executor.

The Law Office of Gretchen J. Kenney has considerable experience helping Trustees and Executors properly administer the estates of their deceased loved ones.  Contact us today at 650-931-2505 to start the process of understanding your duties and the steps that need to be taken.  We will make the process as smooth as possible.

 

The Law Office of Gretchen J. Kenney assists clients with Elder Law, including Long-Term Care Planning for Medi-Cal and Veterans' Pension (Aid & Attendance) Benefits, Estate Planning, Probate, Trust Administration, and Conservatorships in the San Francisco Bay Area.



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| Phone: 650-931-2505

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1900 S. Norfolk St., Suite 350, San Mateo, CA 94403
Phone: 650-931-2505
| Fax: 650-931-2506