Natalie Spiwak June 19, 2018 at 8:00 AM

What is probate and why avoid it?

What is it? 

In simple terms, probate is the legal process of distributing your property after you die. However, “simple” may not be the first word that comes to mind when you think of probate. While probate isn’t always complex, it is important to understand the process, particularly if you wish to spare your heirs from it.

When your estate is subject to probate, a probate court validates your will and then authorizes your executor to distribute your estate to your beneficiaries as you’ve instructed, as well as pay any taxes your estate may owe. When someone dies without a will or trust or has a will when a living trust was required, the estate will be subjected to probate. In these cases, a further administrative proceeding must be held to determine how your estate will be divided. If this happens, the court will name an administrator for your estate, who then follows the probate judge’s instructions on how to distribute your property.  In California, real property with a gross value of over $50,000 and/or $150,000 in cash assets that are not beneficiary driven are subject to probate.

The function of the administrator, or probate referee, is to appraise all property in the estate with the exception of “cash”  items.  The trustee of the estate is responsible to provide the referee with the list of property items needed to be appraised.  When the referee has completed the inventory appraisal, the trustee must file these with the court.

After these steps are completed, all known creditors must be given notice, the debts of the estate paid, and all applicable tax returns filed.  After the completion of this step, a final accounting and petition for final distribution is filed.  There is a hearing date and if accepted, the judge will sign an order allowing for the distribution.  Each of these steps will take various amounts of time.  In the California probate court, there is typically a wait of six to eight weeks before a court date can be obtained. 

Overall, the probate process can take as little as one year, yet often continues for two to three years.  The amount of time it will take to complete the probate and the cost will depend on a variety of factors, such as the size of the estate, and the number of beneficiaries and creditors.

Why should you avoid it?

Although probate is often straightforward, many people want to avoid it. Here’s why:

  • It can be slow. In some cases, it can take years for a probate court to finalize an estate, especially if it’s complicated or involves a contested will.
  • It can be costly. Costs vary from state to state, but probate generally entails executor fees, attorney costs and other administrative expenses, such as appraiser’s fees. In some cases, these charges can accumulate quickly. The expenses are exacerbated if the process drags on for a while.
  • It is public. Since it is a state legal proceeding, what goes on in probate court does not stay there. All the material in the probate process goes into the public record.

How can you avoid it?

  • Give away your assets while you’re alive. You might be able to get your estate to a simplified or exempt probate position by reducing its value while you are still here. Instead of leaving your assets to family and friends after you die, give them the items before then. Not only can this reduce the amount of your estate that goes through probate, it also might help trim or even eliminate future federal and state estate taxes.
  • Establish a living trust. Trusts are appealing when it comes to avoiding probate because property held in trust is not part of your estate upon your death. The reason? A trustee, not you, controls the trust property, and is obligated to distribute it under the terms of the trust agreement.
  • Make accounts payable on death. Bank and other accounts payable on death go directly to your designated beneficiary without going through probate. Some states also allow such transfers of real estate.
  • Own property jointly. Making your spouse or someone else a joint owner facilitates the transfer of the asset without the need for probate. Some ways to hold such assets include joint tenancy with right of survivorship, tenancy by the entirety and community property with right of survivorship.

So now that you know all that probate entails, do your heirs a favor – if you want them to remember you fondly -- and consider creating a trust or other steps so your estate can be distributed without the high costs and long wait.


Natalie Spiwak

Natalie Spiwak is the CEO and Founder of Affinity Trusts.  Affinity Trusts aligns with the leading estate planning law firm, Citadel Law Corporation, to provide SAFE Credit Union members a complete range of advanced estate planning services. By providing accessible seminars, and engaging in personal dialogue with clients about estate planning, Affinity Trusts serves the life-planning needs of many with a high level of passion, expertise and integrity.  When not busy with her clients, Natalie loves spending time with her two young children and because she also has a degree in archeology, loves traveling the world!