Probate is the legal process of settling the estate of a deceased person, specifically resolving all claims and distributing the deceased person’s property. The phrase “going through probate” refers to this legal process.
Having a will still requires a person’s estate to go through a very archaic process, called “probate.” This is the court administered process of dividing up one’s assets in an “orderly” fashion. The only problem is this “orderly” process costs your estate time, money, and makes your estate a public record.
The best reason to have an estate plan is to avoid probate. There are limited circumstances where probate is desirable, but for the vast majority of people it is to be avoided. It is expensive—up to 8% of the gross estate, meaning without accounting for encumbrances, can go to executor and probate attorney fees, and that figure does not include CPA fees, filing fees, bonds, etc. Probate can take a longtime, and it is a public process. Click on this link to see the California Probate Fees for attorneys and executors.
In rough terms, you can lose as much as 6% of your gross assets to probate fees and costs. In California people with under $100,000 in gross assets can avoid probate; as can people who hold their assets in certain title arrangements. In general the time delay, the cost, and the public nature of the probate process make the antiquated procedure unnecessary and in fact painful in many situations; it is something to avoid if possible!
Probate can be particularly cumbersome if you have real property in several states; each state requires its own probate “case.” In addition to costing more, the time and trouble involved with hiring multiple attorneys and attending Court hearings all around the country can be very taxing. A living trust avoids the need for multiple probate cases and the 6% in probate costs.
In some states, after a person residing in that state has died without a valid will or trust, his or her property immediately becomes the property of the spouse, if any, without the need for probate. (This is the case in states that recognize a married couple’s property as community property, such as California, or as tenancy by the entireties.) However, in cases where the surviving spouse does not automatically succeed to the decedent’s property, then it is usually necessary to “probate the estate”, whether or not the decedent had a valid will. A court having jurisdiction of the decedent’s estate (often called a “probate court”) supervises probate, in order to ensure the decedent’s property is distributed according to the direction of his will and the laws of the state.
The will usually names an executor, a person who must carry out the instructions laid out in the will. The executor’s most common task is to marshal all of the decedent’s assets throughout the probate process. If there is no will, or if the will does not name an executor, then the probate or other court having jurisdiction of the decedent’s estate can appoint one.
Probate generally lasts several months, occasionally over a year before all the property can be distributed. The probate process can incur substantial court and attorney costs. One of the many ways to avoid probate is to execute a living trust.
Throughout the probate process, there may be disputes. Anyone may make a claim on the estate, either by petitioning the personal representative or the court. If the claim is rejected, the claimant may file a lawsuit to attempt to prove the claim and collect money. Any dispute generally causes the court to treat the probate more formally, and it may reach the point where the court must approve every transfer of every piece of property.
For these reasons, the guidance of an experienced attorney can be very helpful both during the probate process, as well as before.