Probate is generally required when someone has passed away and their home or other assets like a bank account are not held in a trust or do not have a payable on death beneficiary. If the home or bank account was jointly owned with someone else, then the surviving joint owner will take as to that asset. If both joint owners have died, then it would be subject to probate under the second joint owner to die.
So let’s say we have a house in Long Beach, California that was not held in a trust and the sole homeowner has died. This house would have to be probated in Los Angeles County. This is where the property is situated.
The probate process is designed to determine who are the next of kin of this deceased person and to transfer the house or the sales proceeds of that house to the next of kin. If there was a valid will, then the will provides who will get the house or the proceeds thereof. A will, unfortunately, does not avoid probate. It only makes probate easier.
Probate begins with the filing of a Petition for probate requesting letters of administration or letters testamentary. Letters of administration indicates that the person died without a will. Letters testamentary indicates that the person died with a will.
The filing fee for the petition is $465 dollars. This fee increases every few years.
Then we need to run a legal notification in an approved newspaper in the city in which the person resided. This publication cost varies and the average is about $500 dollars!
Then the court may require that the executor or administrator post a bond. Bond costs is an estate expense and the premium for the bond is based on the credit worthiness of the proposed executor or administrator. Bond can be waived sometimes when the stars align. Well, bond can be waived when there is a will that waives bond. It can sometimes be waived when all heirs agree to sign bond waivers and the judge hearing the matter is also in agreement. This does not always happen.
Then once the court approves the opening of the probate and the order is entered. Then we can have the court also issue letters of administration or letters testamentary. Then the clock starts. Once letters issue, the probate has to remain open for at least 120 days for creditors to file claims, for assets to be marshalled, for bills to be paid and so on. A good probate attorney will advise on how and what needs to be done.
After the expiration of the 120 day period, then the probate could be considered ready to close. If it is actually ready to close, then a final petition is filed with the court with a detailed accounting, report and actions conducted during the probate for final court approval. The hearing date for this final petition is often set out another 3 to 7 months away. So this causes a year to have lapsed – a month to get probate opened. A month to get letters issued. The 120 day waiting period needs to run. And then the closing petition gets no priority in obtaining a hearing date. At the time of filing of the final petition, the court will want another $465 dollars for the closing petition filing fee.
Costs in a probate average about $3500. This does not even include the attorney fees. If probate makes you mad, as it should, then consider setting up a revocable trust. If probate is unavoidable because it is too late then select an attorney that understands how it works and work expeditiously to help you get it done.
By: Jennifer Sawday, Esq.
Partner at TLD Law, Long Beach, CA