Why is it important and advantageous to plan your estate in advance to avoid the probate? Read our detailed post on the San Diego probate process and find out. We touch on the basic structure of the process, the executors and San Diego probate local rules.

What is probate?

Probate is a court-supervised process intended to make the “final accounting” of the deceased. This means identifying and gathering the decedent’s assets, paying the creditors (e.g. paying taxes, debts and expenses) and distributing the balance to the heirs or beneficiaries.

Not all estates go through probate. Actually, probate is only necessary in two instances:

• The deceased left a will without a trust to accompany it (we have already written about mistakes people make when planning their estate)
• The deceased left no will or no will can be found (this is called intestacy)

What does probate administration look like exactly?

The administration is the probate process itself, through which the court oversees the disposition of the deceased’s estate in order to ensure the estate is properly distributed. This administration is subject to state and local rules.

Proper distribution of an estate includes: notifying certain people of the deceased’s passing, verifying the decedent’s creditors, paying creditors’ claims, disposing of or liquidating the estate, managing accountings of probate assets, and filing petitions and reports to the court.

These are just some of the things that the personal representative or executor of the will is required to do, as necessary:

• Identifying the assets and gaining control of them
• Filing Inventory & Appraisal to the court and then submitting it to probate referee
• Maintaining the assets in terms of their safety and condition
• Managing final tax returns (personal and estate)
• Notifying government agencies
• Approving and rejecting creditor’s claims
• Paying debts
• Keeping track of all transactions and providing accounting reports & receipts to the Court
• Attending hearings

This convoluted process is only compounded when parties object to or contest the will. Furthermore, it may be necessary to liquidate some assets to pay debts, and this may require court approval. If there are any life insurance policies or retirement accounts, the executor has to find them and notify the beneficiaries.

What are San Diego probate local rules?

There are state and local laws that apply to the probate process. You can read the San Diego probate local rules in their entirety here. Unfortunately, the rules are too complicated for the vast majority of laymen. They apply to every part of the probate process, such as: consolidation, hearings, petitions, orders, pleadings, notices, summary proceedings, executor appointments, etc.

How much does probate cost?

Probate is a very expensive process and it can consume considerable portions of the estate, if not the whole estate. Just the filing fee and the final distribution fee cost $435 each. The estate is also liable for 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000, 1% of the next $9,000,000 and 0.5% of the next $15,000,000. If the estate exceeds $25,000,000, the court determines the fee. In additionally complicated processes, the attorney and executor can demand that the court allows fees that are higher than those set by law.

The executor of the estate is paid a fee, as well as the attorney, if one is hired. The fees are calculated relative to the size of the estate. Debts do not reduce the value of the estate, which means that the appraised value of the estate is used to determine the fees for the executor and the attorney. For example, a house that is appraised at $2,000,000 will be considered an asset worth $2 million for the purposes of determining the lawyer’s fee (even if the house is under a mortgage of $900,000). Have a look at the fees prescribed by state laws.

Who can/ cannot be a personal representative?

Almost anyone who is interested and willing to be a personal representative can take up this task, even though some restrictions apply. Individuals who cannot be a personal representative/executor are: minors, individuals under conservatorship and non-U.S. residents if they weren’t explicitly named executors in the will. Unless the deceased named their business partner executor in the will, surviving business partners can only be executors if no interested party objects.

It is important to note that executors do not have to be financial experts, but it is recommended that they have good organizational skills. It is more practical to have an executor who lives close to where the decedent lived and one who knows the decedent’s finances.

Does the executor need an attorney?

No, the law doesn’t require the executor to hire an attorney. However, hiring one may be a good idea, especially if the estate is large or complicated. Not only is the process demanding and consuming in terms of time, stress and money, but it is also fraught with responsibilities and liabilities of the executor. Hiring an attorney ensures that the administration is well-managed and that all deadlines are met.

How can the probate be avoided?

As we said in the beginning, not all estates go through probate. Proper estate planning can be of tremendous help in reducing the amount of stress and emotional burden on the surviving loved ones. Not only does estate planning protect the emotional well-being of your loved ones, but it also protects your estate and ensures that your estate is disposed of according to your preferences.

To find out more how estate planning can help you, schedule your free 30-minute consultation with the Law Offices of Irina Sherbak. Our law offices are uniquely dedicated to preserving, protecting and distributing estates. Call us today!