Updated: August 23, 2018
Have you ever wondered what your family would need to do to get their hands on everything you’ve left them if something happened to you tomorrow? How do they obtain title to your real estate and access to your bank accounts? What about your stock portfolio and your business interests?
In this article, you will find out that your family will not have automatic access to your things. They’ll need to go through the probate court to collect them.
You’ll also learn how expensive probate costs.
It’s a privilege to leave a lasting legacy and to pass on as much of your wealth to your loved ones as possible. So take advantage of it and be proactive while you’re still alive and well.
What Is Probate?
If your assets are worth more than $150,000, your family will likely need to go through the probate court to collect your things if you didn’t put a plan in place to avoid probate. Your family must prove to the probate judge that they are entitled to the things you left behind (defined as your “estate” and “assets” in legal terms) and California law will dictate how your assets are distributed among your family.
Your family will need to hire a probate attorney and the court will appoint a personal representative to handle the probate proceedings. The fees for probate attorneys and personal representatives are set by law, and they are very expensive (see chart below).
The entire probate process can take a year or even two years if your family fights over who should get what. So rather than taking the time to grieve and move on, your family will be stuck in court sorting out the uncertainty that you left behind.
What Happens During the Probate Process?
When someone passes away and their belongings need to be claimed or distributed, the probate process is started when you or a probate attorney submits paperwork to the probate court.
If someone passes away and leaves behind a will, then the will names someone to be the executor of the will writer’s estate and belongings. Simply put, the executor is responsible for distributing a deceased person’s property as instructed by the will. Also, the executor must handle financial responsibilities such as paying debts and expenses.
Often, the executor of the will is the person who starts the probate process (or who hires an attorney to do so).
What If Someone Passes Away Without a Will?
Sometimes, people pass away without leaving a will or trust to instruct family members on how to distribute assets. If this happens, then there is no executor.
Usually, a member of the deceased person’s family will have to start the probate process (or hire an attorney). This person is called the administrator of the estate. The administrator and executor have essentially the same responsibilities during the probate process.
When there is no will to reflect a person’s final wishes regarding distribution of personal property, then the probate court will instruct the administrator to distribute any assets according to state law.
The probate court’s order of succession for asset distribution does not take into consideration family dynamics and relationships that are unique to each family. When family members disagree about how assets should be distributed, this creates further conflict and they may even take each other to court.
While this is less than ideal, it does happen. Probate can be a headache even without any family conflict, but a court battle can drag on the probate process for many years.
Notable Example of Passing Away Without a Will: Prince
Legendary pop icon Prince passed away in April 2016 and according to his sister, did not leave a will. Because Prince did not leave instructions about how to handle his extensive properties, finances, and musical collections, his family has gone to court against each other to make a claim for an estate that’s worth up to $300 million.
We can all learn a lot about estate planning from what happened to Prince.
How Much is Probate?
This chart below helps you calculate how much money will be coming out of your pocket to pay for probate fees. Probate means less money for your family and more money for probate attorneys and the courts.
Let’s imagine that you have a $500,000 home, $100,000 in stocks, $50,000 in cash, and a $20,000 car when you pass away. Your estate will be valued at $670,000, which means your family will be paying almost $34,000 in probate fees, plus court filing fees, before they can receive whatever's left in your estate. Ouch! And there will be additional attorney's fees if your family fights over your assets.
(Not So) Fun Fact
Over sixty percent of Americans don’t have an estate plan, which is the reason the probate industry is a $2 billion per year business. That’s $2 billion dollars every year that families like yours are not pocketing from their loved ones.
Estate Planning Makes Financial Sense
Probate is likely 10 to 20 times more expensive than estate planning, so it's a no-brainer to plan ahead so your family can avoid probate. By permitting the use of living trusts and other tools to avoid probate, the law gives you a golden ticket to hand to your family.
Will you take advantage of it?
Also, estate planning has intrinsic value. Your family will know what to do with the things you leave behind without going to probate court. They will less likely be fighting over who should get what. And they'll spend more time honoring your legacy and moving forward with their lives. Click here to schedule a free consultation with our Los Angeles wills & trusts lawyer to help you.
So What's Your Excuse?
You can reach me Edmund Yan, Los Angeles estate planning lawyer, at firstname.lastname@example.org if have any questions.
Need A Probate Attorney?
Amity Law Group's trusted probate attorneys understand the headache and stress of administering a loved one's estate. The probate process can be time-consuming and expensive, but luckily our attorneys have decades of experience representing family members in probate courts throughout Los Angeles County and Orange County so that they don't have to navigate the complicated legal system themselves.
How Much Are Probate Court Costs/Fees in Los Angeles?
In addition to the attorney's fees listed above, there is also a fee of $465 charged to file a probate petition at the beginning of the probate process. For the most straightforward of probate cases, there will also be a filing fee of $435 toward the end of the probate process to file the petition for final distribution of the decedent's assets.
Other steps of the probate process will incur additional fees as well, such as:
Fees for publishing the probate notice, or Notice of Petition to Administer Estate
Fees to obtain official court documents
Fees for services provided by the probate referee
It's no secret that probate can be costly and drawn out. But you don't have to face it alone. Our probate attorneys are ready to help. Schedule your free case evaluation today by calling (626) 307-2800.