Estate Planning Practice Blog

Probate Tidbit No. 3 -- Request for Special Notice.

Tidbit No. 3
Has a probate been opened involving a relative or other loved one? If you are not a natural heir or named beneficiary for this person and you wish to receive notices of all of the goings on in the probate proceedings, you can file a Request for Special Notice.

Generally, if you are already named in the Petition for Probate on the last page you may automatically receive all notices, pleadings and other documents involved in the probate proceeding. In this case, filing a Request for Special Notice may be redundant, but it puts the court on notice that you want to monitor the probate proceeding.

You can also have an attorney represent you as a natural heir or beneficiary during a probate proceeding as well to protect your interest. In this case, the attorney may file a Request for Special Notice so that they also get the same notices, pleadings and other documents involved in the probate.

To file a Request for Special Notice, you will need to use this form and follow the directions for filing and service.

For more information, please consult with an attorney who handles probate matters.

Probate Tidbit No. 2 -- Creditor's Claims.

Tidbit No. 2
Does someone who died recently owe you money? If  so and probate for that person's estate has been opened, you can file a Creditor's Claim against the estate.  But you have a short timeframe in which to do so. (You can also make a claim when there is no probate estate, but there exists a trust -- however, we are not discussing trusts in this post.)

Generally, if you are sent a Notice of Administration because you are a known creditor, you have 60 days to file a Creditor's Claim.  If you are not sent this Notice of Administration then you must file your Creditor's Claim within 4 months after the Letters Testamentary or Letters of Administration were issued to the personal representative of the estate.

Your claim must be mailed to the personal representative, mailed to his or her attorney and filed with the court to be considered timely processed. The personal representative will either approve or reject your claim. If your claim is approved, you will get your money back. If your claim is rejected, you can make an appeal.

This is why a probate estate must remain open for at least 4 months from the date the Letters issue. This is the time period proscribed by law for any creditors to make their claim against the estate. So, we can also safely conclude that a regular probate proceeding in California is never quicker than 4 months.

To get started on Creditor's Claims, you will need to complete this form.

For more information about this process, please consult with an attorney that handles probate matters.

Probate Tidbit No. 1 -- Cost of Opening Probate.

During the month of April, I will be posting about probate in California to educate the blogosphere on how probate works in California in easy to understand tidbits and commentary.

Tidbit No. 1
Probate is expensive.

The filing fee for opening a probate estate in California calculated based on the value of the estate. If you don't know the value of the estate, you will be asked to pay up when the estate is in a position to close. The minimum filing fee amount to open a probate estate is $320.00.  Under no circumstances is $320.00 considered chump change when someone has passed away and a probate estate needs to be opened. Somebody's checkbook gets opened to pay for the filing fee.

The next cost incurred is the cost of publishing the required legal notice in the newspaper. This averages $500.00.

Next, there are fees for the court appointed probate referee to appraise the estate assets.

Then there are costs of obtaining a probate bond if one is necessary.

Lastly, attorney fees are high.

So, let me reiterate, probate is expensive.

Intestate Will By The State.

If you die without a Will or a Trust, here's a great tongue-in-cheek example of what the Will that many states will draw up for you in your stead:

[Remember, this is tongue-in-cheek and not a valid Will by any means. Don't copy anything!]

INTESTATE WILL OF  Amy Doe

(Drawn up for Her by the State)

I, AMY DOE, of _______________________________, declare this to be my will.

One

1.1    I give to my husband only one-third (1/3) of my possessions, and I give to my children the remaining two thirds (2/3) equally.

1.2    I appoint my husband as guardian of the property of my minor children, but as a safeguard I require that he report to the Probate Court each year and render an accounting of how, why and where he spent the money necessary for the proper care of my children.

1.3    As a further safeguard, I direct my husband to produce to the Probate Court a Performance Bond to guarantee that he exercises proper judgment in the handling, investing and spending of the children's money.

1.4    As a final safeguard, my children shall have the right to demand and receive a complete accounting from their father of all of his financial actions with their money as soon as they reach legal age.

1.5    When my daughter reaches age eighteen (18), she shall have full rights to withdraw and spend her share of my estate. My son shall have this right as soon as he reaches age eighteen (18). No one shall have any right to question my children's actions on how they decide to spend their respective shares, after they are received.

Two

2.1    Should my husband remarry and then die intestate, his second wife shall be entitled to one-third (1/3) of everything my former husband owns.

2.2    Should my children need some of this share for their support, the second wife shall not be bound to spend any part of this share on my children's behalf. The second wife shall have the sole right to decide who is to get her share, even to the exclusion of my children.

Three

3.1    Should my husband predecease me or die while any of my children are minors, I do not wish to exercise my right to nominate the guardian of the person and/or of the property of my children.  Rather than nominating a guardian of my preference, I direct my relatives to get together and select a guardian by mutual agreement.

3.2    If my relatives fail to agree on a guardian, I direct the Probate Court to make the selection.  If the court wishes, it may appoint a stranger acceptable to it who will be entitled to compensation for handling my children's property.

Four

4.1    Under the existing tax laws, there are certain legitimate avenues open to me to lower death taxes.  Since I prefer to have my money used for governmental purposes rather than for the benefit of my husband and children, I have made no effort to lower death taxes.

Five

5.1    I am leaving it to the discretion of the Probate Court to appoint my
husband my personal representative.  Since I do not care about saving money for my family:

5.1.1    I know that my husband as Personal Representative may have to have, and that my estate may have to pay, a premium on my husband's Performance Bond as Personal Representative;

5.1.2    I know that my Personal Representative will have to obtain court approval for all sales of estate assets which will increase attorney's fees and court costs.

5.2    Since I am allowing the State to write my will for me, I accept all changes in the law affecting my estate which are made by statute and court decision at any time prior to my death.

5.3    I hereby forego the opportunity to state a presumption regarding my death in case my spouse and I die simultaneously, preferring the Uniform Simultaneous Death Act to apply.

5.4    I hereby forego the opportunity to require a beneficiary hereunder to survive me for a certain length of time so that if a beneficiary dies shortly after me, there will be a probate both at my death and at the beneficiary's death.  I do this partly because I know there are a lot of lawyers today and I want to create probate work for them, and partly because I want the state and federal governments to be able to get twice as much in death taxes in a short period of item.

Made by the State for me on this, the date of my death __________________.

________________________
Amy Doe
(No Signature Required)

NEW SEMINAR! Estate Administration Procedures

Monica Goel is a featured speaker at the upcoming National Business Institute seminar on June 14, 2007, in Irvine.  For information about Monica's seminar, click here.

She will be speaking throughout the full day on Estate Administration Procedures: Why Each Step is Important.

Anyone can register and attend this seminar through the National Business Institute. If you hold a professional designation or license, you may be able to receive continuing education credits for attending.

Cost of Probate: Exorbitant.

Probate is not inexpensive. It is also not necessary if you plan properly. This planning is called "estate planning" when it really should be called "probate avoidance."

Terminology notwithstanding, two case studies this week on probate and how it affects your loved ones in terms of pure dollars:

1.    An individual did not own property, but had a rather large 401k plan worth over $500,000.00. There was no beneficiary named on this 401k asset. There was no surviving spouse or children. Probate had to be opened to determine how title of the account should pass to the next of kin. Cost: $13,000.00 for attorney fees alone in probate.

2. A middle aged man died suddenly leaving his kids in a lurch. He owned over 3 properties across the state in nice locations like Monterey, Seal Beach and a cabin in Lake Arrowhead. The retainer to be paid up front just to take the probate case: $1,500.00 and that's small change toward court costs, publication costs, appraisal costs and attorney fees.

Contrast the above two costs with the cost of proper estate planning: $1,500.00 for most individuals and married couples with a real property asset and a few bank/retirement accounts. The cost savings is more than just money. It also saves time, anguish and emotional toil when you take care of your estate when you are alive and well. I know this all too well when I had to probate my own father's estate before I became an attorney. It's not a good thing.

Having a trust is often the best recommendation for estate planning for most individuals. Get yours done today.

Probate is Not Always Necessary to Transfer Title.

How do you know when probate is required?  Here are some of the circumstances you may encounter:

Transfers of personal property under Probate Code §13100

If the decedent has personal property in his or her name alone valued at less than $100,000, a Declaration under Probate Code §13100 can be used. When determining the value of the estate, you would not use joint tenancy accounts, wages, etc. (see P.C. 13050 for excluded property). You must wait 40 days after the date of death. Attached is a sample Declaration. A certified copy of Death Certificate must be attached to the Declaration. The Declaration is provided to the bank, stock company, etc.

Transfer of real property under Petition to Determine Succession to Real Property

If the decedent’s main asset is real property valued at less than $100,000, a Petition to Determine Succession to Real Property can be filed under P.C. §13151. This is a “one time hearing” type of petition. The court grants it and the Order gets recorded to effectuate the transfer. Attached is a copy of the petition.

Transfer of Real Property of Small Value

If the gross value of all real property in decedent’s estate in California does not exceed $20,000, the Affidavit Re Real Property of Small Value can be used. Probate Code §13200.

Joint Tenancy Title

If title to real property is held as joint tenants, an Affidavit Death of Joint Tenant must be recorded, attaching a certified copy of the Death Certificate. If there is personal property held in joint tenancy, such as stock, the stock transfer agents will have their own forms (Affidavit of Domicile, etc.) to transfer stock.

Spousal Property Petition

If title to the decedent’s property (real and/or personal) is held as “community property”, you would use a Spousal Property Petition under P.C. §13650, which is a “one time hearing” type of petition. A copy of the petition is attached. The petition can be used to determine the property passing to the surviving spouse (i.e., the decedent’s interest), and also to confirm the surviving spouse’s own interest. The value of the estate is not a consideration with this type of petition. The petition must include certain allegations as to community property status (how long married, etc.) and they are outlined in the Probate Rules.

Under certain circumstances, this petition can also be used for decedent’s separate property. For instance, if the decedent has a Will specifically leaving everything to his or her spouse, separate property can be included in the petition.

Probate

A probate is almost always not necessary when there is a surviving spouse. If there is no surviving spouse and the decedent’s estate is worth more than $100,000, you will most likely need to file a probate.

Filing Fees to Open Probate.

Probate is one of those things that has an instant cost factor. When you file papers to open an estate, the court charges you a filing fee to submit the papers.

The filing fee for probate cases is based on the size of the estate. If you are not sure about the size or value of the estate when you first open a probate proceeding, you can make an adjustment later in your final petition to close probate. [This is the graduated filing fee adjustment rule.]

The probate filing fee needs to be paid by someone other than the estate initially just to open the case. May I suggest that what your loved one might pay in the filing fee would be better used towards creating a proper estate plan?

2007 probate filing fees in California courts:

First Petition for Letters and Special Letters of Administration; for Letters Testamentary

Estate under $250,000 = $320.00
Estate of at least $250,00 and under $500,000 = $385.00
Estate of at least $500,00 and under  $750,000 = $485.00
Estate of at least $750,00 and under  $1,000,000 = $635.00
Estate of at least $1,00,000 and under  $1,500,000 = $1,135.00
Estate of at least $1,500,00 and under $2,000,000 = $2,135.00
Estate of at least $2,000,000 and under $2,500,000 = $2,635.00
Estate of at least $2,500,00 and under $3,500,000* = $3,635.00

*Anything higher, contact the clerk.

Have a Probate Matter?

Has someone you loved passed away recently? Are you concerned that you might have to open probate for a loved one's estate?

Despite what you may have heard about probate, we try to make the process as easy as possible for you.

Tredway, Lumsdaine & Doyle has three attorneys who handle probate matters as a regular part of their practice. The firm also has two exceptionally qualified probate paralegals that assist with every probate case. Together, this team works with you to handle your probate matters with as much efficiency and ease of administration as possible given the circumstances.

Tredway, Lumsdaine & Doyle is also very experienced in litigation matters involving probate cases.  Fee arrangements for probate litigation matters are usually on retainer and separate from the statutory fee arrangements for a probate matter not involving litigation.

One thing is certain, if you have a probate matter, please consult us first. We can explain the process to you, help you navigate the court system with our committed attorneys and paralegals.  Having the Tredway team on your side for probate simplifies the process more than just working with a solo attorney.

Initial consultations involving probate matters are at no charge. Please call any of the numbers on the left or email attorneys Jennifer or Monica for more information.

California Probate Is A Mess.

For most individuals, opening probate in California is not a delightful or even pleasant experience. It's time consuming. It's confusing. And it's very expensive on the back end for statutory fees.

Many other states, however, have more streamlined probate procedures. Meaning probate is easier, less time consuming and less costly. Yay.

Also, other states offer beneficiary deeds for real property. A beneficiary deed allows you to slap on a payable on death beneficiary for your real estate holdings.

California does not have neither a streamlined probate process for real estate valued more than $20,000 (which is nearly any home in this state) nor beneficiary deeds. This is why in California it is very important to have your real estate holdings placed into a Living Trust if you wish to avoid probate.

For many, the goal of estate planning is probate avoidance. This makes it easy for your loved ones. It also tells them who should get what. Nice.