How to Probate an Estate in California

How to Probate an Estate in California

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How to Probate an Estate in California

and

, 24th Edition

Learn how probate works, make informed decisions, and know when to get help from an attorney. How to Probate an Estate in California helps you:

  • read a will
  • handle probate paperwork
  • collect life insurance and other benefits
  • get help from a lawyer

Save time and money with this all-in-one guide!

Product Details

Learn the system, minimize fees

When you’ve lost a loved one, the inevitable legal matters can seem difficult and confusing. Learning about probate and taking on some of the bureaucratic tasks yourself can provide clarity, peace of mind, and reduced legal fees.

How to Probate an Estate in California explains how to handle a simple estate and make clear which tasks you may be able to manage without a lawyer.

Find out how to:

  • determine who inherits property
  • collect life insurance and other death benefits
  • use non-court transfer procedures
  • complete and file court paperwork
  • pay bills and taxes, and
  • transfer property to heirs and beneficiaries.

Whether you plan to do most of the work yourself or expect to work with an attorney, How to Probate an Estate in California will save you time and reduce confusion when wrapping up your loved one's estate.

The completely updated 24th edition provides the latest laws, tax information, forms and court procedures.

Nolo has dozens of products created just for California residents. Check out Nolo's list of California products.

 

Nolo has published incredibly useful lay guidebooks and consumer software on legal issues [since 1971].-San Francisco Chronicle

“I probated my mother’s $200,000 estate from 1,000 miles away and it cost about $200 with fees, postage and a few phone calls.”-M.B., Sequim, WA

“Marvelous book! Wonderful book! Everything worked EXACTLY as explained. Sample letters were extremely helpful.”-R.L., Lodi, CA

ISBN
9781413324884
Number of Pages
496
Included Forms


Judicial Council Forms

  • DE-111 Petition for Probate
  • DE-120 Notice of Hearing
  • DE-121 Notice of Petition to Administer Estate
  • DE-121 (MA) Attachment to Notice of Petition to Administer Estate
  • DE-131 Proof of Subscribing Witness
  • DE-135 Proof of Holographic Instrument
  • DE-140 Order for Probate
  • DE-147 Duties and Liabilities of Personal Representative
  • DE-147S Confidential Supplement to Duties and Liabilities of Personal Representative
  • DE-150 Letters
  • DE-157 Notice of Administration to Creditors
  • DE-160 Inventory and Appraisal
  • DE-161 Inventory and Appraisal Attachment
  • DE-165 Notice of Proposed Action
  • DE-174 Allowance or Rejection of Creditor's Claim
  • DE-221 Spousal or Domestic Partner Property Petition
  • DE-226 Spousal or Domestic Partner Property Order
  • DE-270 Ex Parte Petition for Authority to Sell Securities and Order
  • DE-295 Ex Parte Petition for Final Discharge and Order
  • DE-305 Affidavit re Real Property of Small Value ($20,000 or Less)
  • DE-310 Petition to Determine Succession to Real Property (Estates of $100,000 or Less)
  • DE-315 Order Determining Succession to Real Property

Non-Judicial Council Forms

  • Declaration Regarding Property Passing to Decedent's Surviving Spouse or Registered Domestic Partner Under Probate Code § 13500
  • Who Inherits Under the Will?
  • Schedule of Assets
  • Notification by Trustee
  • Affidavit -- Death of Joint Tenant
  • Affidavit -- Death of Trustee
  • Affidavit -- Death of Spouse
  • Affidavit -- Death of Domestic Partner
  • Affidavit -- Death of Spouse or Domestic Partner -- Survivorship Community Property
  • Affidavit for Collection of Personal Property Under California
  • Probate Code §§ 13100-13106
  • Deed to Real Property
  • Probate Case Cover Sheet -- Certificate of Grounds for Assignment to District (L.A. County)
  • Application and Order Appointing Probate Referee (L.A. County)
  • Change in Ownership Statement (Death of Real Property Owner) (L.A. County)
  • Affidavit or Declaration for Final Discharge and Order (L.A. County)
  • Preliminary Change of Ownership Report

About the Author

  • Julia Nissley

    Julia Nissley was the cherished author of How to Probate an Estate in California. She wrote the book while working as a probate administrator with the Los Angeles law firm of Silverberg, Rosen, Leon & Behr. She later opened her own probate-form preparation service, and for the next 25 years helped hundreds of families probate California estates. During that time, she also kept her book meticulously up to date. Julia passed away in late 2015, after finishing her work on the 23rd edition.

  • Lisa Fialco, Attorney

    Lisa Fialco practices law with Kelley & Farren, LLP in San Rafael, California. Her background in consumer protection motivates her commitment to demystifying estate planning and probate. Lisa is a Certified Specialist in Estate Planning, Trust and Probate Law, certified by The State Bar of California Board of Legal Specialization.  She is a graduate of Wesleyan University and the University of California, Berkeley, School of Law. In 2017, she thoroughly reviewed, revised, and updated the 24th edition of How to Probate an Estate in California.

Table of Contents

Your Legal Companion for Probate

1. An Overview

  • What Is Probate?
  • What Is Involved in Settling an Estate?
  • How Long Does It Take to Settle an Estate?
  • What This Book Covers
  • Simple Estate Checklist
  • Important Terms in Probate
  • Insolvent Estates
  • Estate Taxes
  • Do You Need an Attorney?

2. First Steps in Settling an Estate

  • Who Should Act as the Estate Representative?
  • Responsibilities of the Estate Representative
  • Preliminary Duties of the Estate Representative
  • Preliminary Collection of Assets

3. Who Are the Heirs and Beneficiaries?

  • Where to Start
  • Reading the Will
  • Compare Schedule of Assets With Property Left in Will
  • When Public Policy Affects the Distribution of Property
  • If There Is No Will
  • Right of Representation and Gifts to Descendants

4. What Is the Decedent's Estate?

  • Real Property
  • Personal Property
  • What Establishes Ownership of Property?
  • How Was the Decedent's Property Owned?
  • How to Determine Whether Property Is Community or Separate
  • Actions That Change the Character of Property
  • Property That Is a Mixture of Community and Separate Property
  • Examples of Property Ownership
  • Property Acquired by Couples Before They Moved to California

5. Preparing a Schedule of the Assets and Debts

  • Describe Each Asset
  • Value Each Asset (Column A)
  • How to Determine Ownership of Property (Columns B & C)
  • List the Value of the Decedent's Interest (Column D)
  • Determine Whether Property Is Probate or Nonprobate Asset (Column E)
  • List All Debts
  • Checklist of Property to List on Schedule of Assets
  • Schedule of Assets for a Sample Estate

6. How to Identify the Best Transfer Procedure

  • Nonprobate Assets
  • Assets That May Be Subject to Formal Probate
  • Examples of How Assets Are Transferred in Typical Estates
  • Sample Estates

7. What About Taxes?

  • Decedent's Final Income Tax Returns
  • Fiduciary Income Tax Returns
  • Other Income Tax Returns
  • Stepped-Up Tax Basis Rules for Inherited Property
  • Federal Estate Tax Return
  • California Inheritance Tax
  • Tax Issues for Some Typical Estates

8. Transferring Title to Real Property

  • Ways to Transfer Real Estate After Death
  • Basic Information on Recording Documents
  • Change in Ownership Statements
  • How to Record Your Document Transferring Title
  • Mortgages
  • Reverse Mortgages

9. How to Transfer Securities

  • Documents Required to Transfer Securities
  • The Stock or Bond Power
  • The Affidavit of Domicile
  • The Transmittal Letter
  • How to Sell Securities

10. Joint Tenancy Property

  • Where to Start
  • How to Clear Title to Real Property in Joint Tenancy
  • How to Clear Title to Securities Held in Joint Tenancy
  • How to Clear Title to Motor Vehicles and Small Boats Held in Joint Tenancy
  • How to Clear Title to Joint Tenancy Bank Accounts (and Pay-on-Death Accounts)
  • How to Clear Title to Money Market Funds and Mutual Funds
  • How to Clear Title to U.S. Savings Bonds in Co-Ownership

11. Transferring Small Estates Under $150,000

  • Overview of Transfer Procedures for Small Estates
  • How to Determine Whether You Can Use Small Estate Procedures
  • How to Transfer the Property

12. How to Transfer Trust Property

  • Notifying Heirs and Beneficiaries
  • Trust Property
  • Handling Debts and Expenses
  • How to Transfer Property Held in Living Trusts

13. An Overview of the Probate Court Process

  • Do You Really Need a Probate Court Proceeding?
  • Probate Checklist
  • Dealing With the Probate Court
  • Beginning the Probate Process
  • Taking Care of the Estate During Probate
  • Closing the Estate

14. Conducting a Simple Probate Proceeding

  • Step 1: Prepare the Petition for Probate
  • Step 2: Prepare the Certificate of Assignment
  • Step 3: Prepare the Notice of Petition to Administer Estate
  • Step 4: File Your Petition for Probate
  • Step 5: Complete the Proof of Subscribing Witness Form
  • Step 6: Complete a Proof of Holographic Instrument
  • Step 7: Notify Government Agencies
  • Step 8: Prepare Your Order for Probate
  • Step 9: Obtain and Respond to the Calendar Notes
  • Step 10: Prepare the Letters
  • Step 11: Prepare the Duties and Liabilities of Personal Representative Form
  • Step 12: Prepare the Application Appointing Probate Referee
  • Step 13: Prepare Notice of Proposed Action, If Necessary
  • Step 14: Prepare the Inventory and Appraisal Form
  • Step 15: Notify Creditors and Deal With Creditors' Claims and Other Debts
  • Step 16: Prepare the Petition for Final Distribution
  • Step 17: Prepare Notice of Hearing (Probate)
  • Step 18: Prepare Order of Final Distribution
  • Step 19: Transfer the Assets and Obtain Court Receipts
  • Step 20: Request Discharge From Your Duties

15. Handling Property That Passes Outright to the
Surviving Spouse or Domestic Partner

  • An Overview of These Simplified Procedures
  • Collecting Compensation Owed the Decedent
  • Affidavit for Transferring Community Real Property
  • Survivorship Community Property
  • The Spousal or Domestic Partner Property Petition
  • How to Transfer the Assets to the Surviving Spouse or Partner

16. If You Need Expert Help

  • Deciding to Get Help
  • What Kind of Expert Do You Need?
  • Working with an Attorney

Sample Chapter

Chapter 1  An Overview

What Is Probate?

What Is Involved in Settling an Estate?

How Long Does It Take to Settle an Estate?

What This Book Covers

Simple Estate Checklist

Important Terms in Probate

The Gross Estate and the Net Estate

The Probate Estate

The Taxable Estate

Debts and Insolvent Estates

Estate Taxes

Do You Need an Attorney?

 

What Is Probate?

Many people aren’t sure what the term “probate” really means. They think of it only as some long, drawn out, and costly legal formality surrounding a deceased person’s affairs. Technically, probate means “proving the will” through a probate court proceeding. A generation ago, virtually every estate had to be reviewed by a judge before it could pass to those who would inherit it. Today there are several ways to transfer property at death, some of which don’t require formal court proceedings. The term “probate” is now often used broadly to describe the entire process by which an estate is settled and distributed.

For example, a surviving spouse or domestic partner may receive property outright from the deceased spouse or partner without any court probate proceedings at all. Joint tenancy property also escapes the need for formal probate, as does property left in a living (inter vivos) trust and property in a pay-on-death bank account. If an estate consists of property worth less than $150,000, it, too, can be transferred outside of formal probate. Fortunately, the paperwork necessary to actually transfer property to its new owners in the foregoing situations is neither time-consuming nor difficult. We discuss all of these procedures, as well as how to do a formal probate court proceeding.

There is one thing you should understand at the outset: The person who settles an estate usually doesn’t have much choice as to which property transfer method to use. That is, whether you are required to use a formal probate or a simpler method to transfer property at death depends on how much (or little) planning the decedent (deceased person) did before death to avoid probate and how the decedent held title to the assets. This is discussed in detail as we go along.

Both formal probate and some of the other nonprobate procedures involve filing papers at a court clerk’s office, usually in the county where the decedent resided at the time of death. In other words, most probate matters don’t require that you appear in court before a judge. In fact, settling an estate by mail, by fax, or electronic filing is now the norm.

What Is Involved in Settling an Estate?

Generally, settling an estate is a continuing process that:

determines what property is owned by the decedent

pays the decedent’s debts and taxes, if any, and

distributes all property that is left to the appropriate beneficiaries.

When a person dies, she may own several categories of assets. Among these might be household belongings, bank and money market accounts, vehicles, mutual funds, stocks, business interests, and insurance policies, as well as real property. All property owned by the decedent at the time of his or her death, no matter the kind or the value, is called his or her “estate.”

To get this property out of the name of the decedent and into the names of the people who inherit it requires a legal bridge. There are several types of legal procedures or bridges to move different kinds of property to their new owners. Some of these are the equivalent of large suspension bridges that will carry a lot of property while others are of much less use and might be more analogous to a footbridge. Lawyers often call this process “administering an estate.” In this book we refer to these procedures collectively as “settling an estate.”

Most of the decedent’s estate will be passed to the persons named in his or her will, or, if there is no will, to certain close relatives according to priorities established by state law (called “intestate succession”). However, to repeat, no matter how property is held, it must cross an estate settlement bridge before those entitled to inherit may legally take possession. The formal court probate process is but one of these bridges. Some of the other bridges involve community property transfers, clearing title to joint tenancy property, transfer to a beneficiary designated by contract, winding up living trusts, and settling very small estates that are exempt from probate.

How Long Does It Take to Settle an Estate?

If a formal probate court procedure is required, it usually takes nine to twelve months to complete all the necessary steps, unless you are dealing with a very complicated estate. On the other hand, if the decedent planned his or her estate to avoid probate, or the estate is small, or everything goes to a surviving spouse or domestic partner, then the estate may be settled in a matter of weeks by using some easier nonprobate procedures. See the checklist for formal probate in Chapter 13, for details about the typical length of a formal probate administration.

 

CAUTION

The procedures in this book are only for California estates. Real property and tangible personal property (see Chapter 4 for definitions) located outside of California are not part of a California estate and cannot be transferred following the instructions in this book. To transfer property located outside of California, you will either have to familiarize yourself with that state’s rules (these will be similar, but by no means identical to those in effect in California) or hire a lawyer in the state where the property is located.

What This Book Covers

Not all estates can be settled entirely by using a self-help manual. Although many California estates can be settled with the procedures described in the following chapters, some estates will require at least some formal legal assistance. Therefore, it’s important to know if the estate you are dealing with has complexities beyond the scope of this book.

First, an estate that can be settled using this book (a “simple estate,” for lack of a better term) is one that consists of the common types of assets, such as houses, land, a mobile home, bank accounts, household goods, automobiles, collectibles, stocks, money market funds, promissory notes, etc. More complicated assets, such as complex investments, business or partnership interests, or royalties from copyrights or patents, are often not as easy to deal with because they involve additional factors, such as determining the extent of the decedent’s interest in the property and how that interest is transferred to the new owner. However, it may be possible to include unusual assets in a simple estate if the person settling the estate is experienced in such matters or has help from an accountant or attorney along the way. When questions arise as to ownership of an asset, or when third parties (anyone not named in the will and not an heir under state law) make claims against the estate (as would be the case if someone threatened to sue over a disputed claim), you have a complicated situation that will require help beyond this book.

Second, for an estate to be “simple” there should be no disagreements among the beneficiaries, especially as to the distribution of the property. There is no question that dividing up a decedent’s property can sometimes bring out the worst in human nature. If you face a situation where family members are angry and lawsuits are threatened, it is not a simple estate. To settle an estate without unnecessary delays or complications and without a lawyer, you need the cooperation of everyone involved. If you don’t have it (for example, a disappointed beneficiary or family member plans to contest the will or otherwise engage in obstructionist behavior), you will need professional help. (See Chapter 16.)

Third, and contrary to what you might think, a simple estate does not have to be small. An additional concern with a large estate is federal estate taxes, which affect estates valued over approximately $11.2 million (in 2018). Estate income tax returns may also be required. You can hire an accountant who is familiar with estate taxes to prepare the necessary tax returns for you, leaving you free to handle the rest of the settlement procedures yourself. We provide an overview of estate taxation in Chapter 7.

Even if you plan to get legal assistance to administer the estate—either because the estate is not simple or because you prefer to have an experienced person guiding the process—you may find this book helpful. Understanding the process will help you serve as the personal representative with confidence. Also, if you are a beneficiary, you may want to learn about the process so that you can have realistic expectations about what must be done before you get your inheritance.

tip

This book does not cover the details of trust administration. Many people in California create a living trust to avoid a court probate procedure at their death. If the decedent set up a trust, the person named in the trust will need to follow the terms of the trust to distribute the assets of the trust. Administering a trust has its own legal requirements, which are not discussed in detail in this book.

Simple Estate Checklist

The checklist below shows all the basic steps in settling a simple estate in California. Each step is explained later in the book.

This list may appear a bit intimidating at first, but don’t let it discourage you. Not all of these steps are required in every situation, and even then you won’t find them difficult. As with so many other things in life, probating a simple estate is much like putting one foot in front of the other. If you understand the big picture, take it step-by-step, pay close attention to the instructions, and get professional assistance when needed, you can have a smooth and successful administration.

 

How to Start Settling a Simple Estate

1. Assemble Important Documents

•  Locate the will, if any, and make copies.

•  Order certified copies of the death certificate.

•  Locate other documents relevant to assets, including account statements, deeds,
insurance policies, and beneficiary designation forms.

•  Locate other important documents, including marital agreements and trusts.

2. Determine the People Involved

•  Determine who will be the estate representative.

•  Determine heirs and beneficiaries and prepare a list of names, ages, and addresses.

3. Determine Assets and Creditors

•  Assemble and list assets such as properties, bank accounts, and retirement accounts.

•  Determine how title is held to each asset (for example, in the decedent’s name alone,
in joint tenancy, in a living trust, etc.).

•  Determine whether each asset is community or separate property.

•  Estimate the value of each asset and, if the decedent was a co-owner,
the value of the decedent’s share.

•  List debts and obligations.  

4. Determine Procedures Required and Begin Process

•  Determine decedent’s legal residence.

•  Determine methods for transferring assets.

•  Initiate procedures to administer estate and transfer assets. Possible procedures include:

•  terminate joint tenancies

•  transfers of some estates worth $150,000 or less without formal probate administration

•  spousal / domestic partner transfer procedures

•  formal court probate administration, and

•  trust administration.

•  Pay debts having priority as soon as estate funds are available, if the estate is solvent.   

5. File Tax Returns and Arrange for the Payment of Taxes

•  Arrange for final income tax returns and estate fiduciary income tax returns, if required.

•  Prepare and file federal estate tax return, if required.

 

Important Terms in Probate

As you read through this material, you will be introduced to a number of technical words and phrases used by lawyers and court personnel. We define these as we go along, with occasional reminders. If you become momentarily confused, refer to the glossary, which follows Chapter 16.

The Gross Estate and the Net Estate

You will encounter the terms “gross estate” and “net estate” while settling an estate. The decedent’s gross estate is generally the fair market value at date of death of all property that he owned. It includes everything in which the decedent had any financial interest—houses, insurance, personal effects, automobiles, bank accounts, unimproved land, businesses, and so on. It includes only the decedent’s portion of the asset. How the decedent owned the property (for example, in a living trust, in joint tenancy, or as community property) may determine the decedent’s portion for the purposes of the gross estate. The net estate, on the other hand, is the value of what is left after subtracting from the gross estate the total amount of any mortgages, liens, or other debts owed by the decedent at the time of death.

Example 1: Suppose Harry died, leaving a home, car, stocks, and some cash in the bank. To arrive at his gross estate you would add the value of all his property without looking to see if Harry owed any money on any of it. Let’s assume that Harry’s gross estate was $500,000. Now, assume when we check to see if Harry owed money, we discover that he had a mortgage of $150,000 against the house. This means his net estate (the value of all of his property less what he owed on it) would be worth $350,000.

Example 2: If Diego and Louisa, husband and wife, together own as community property a house, car, and savings account having a total gross value of $800,000, and owe $300,000 in debts, the net value of their community property would be $500,000. However, if Louisa died, only one-half of their property would be included in her estate because under California community property rules, discussed in detail in Chapter 4, the other half is Diego’s. Thus, Louisa’s gross estate would be $400,000 and her net estate $250,000.

The Probate Estate

The “probate estate,” quite simply, is all of the decedent’s property that must go through probate. This is very likely to be less than the total amount of property the decedent owned, because if an asset already has a named beneficiary, or if title is held in a way that avoids probate, then it isn’t part of the probate estate. To return to the bridge analogy discussed earlier, this means that property held in one of these ways can be transferred to the proper beneficiary using one of the alternate (nonprobate) bridges.

As a general rule, the following types of property need not be included in a probate administration:

joint tenancy property

life insurance with a named beneficiary other than the decedent’s estate

pension plan distributions

property in living (inter vivos) trusts

money in a bank account that has a named beneficiary who is to be paid on death

individual retirement accounts (IRAs) or
other retirement plans that have named beneficiaries

community property or separate property that passes outright to a surviving spouse or domestic partner (this sometimes requires an abbreviated court procedure), and

real estate transferred with a transfer-on-death (beneficiary) deed.

Put another way, the probate estate (property that must cross the formal probate bridge) consists of all property except the property that falls into the above categories. Where there has been predeath planning to avoid probate, little or no property may have to be transferred over the probate court bridge.

CAUTION

You can simplify the settlement of your own estate. Resources covering this subject are Plan Your Estate, by Denis Clifford (Nolo), and 8 Ways to Avoid Probate, by Mary Randolph (Nolo). You can also find lots of good information at Nolo’s Wills, Trusts & Probate Center at www.nolo.com.

Overview of How to Settle an Estate in California

Preliminary steps: Collect information and documents (Chapters 2, 3, 4).

List assets, determine date-of-death values and figure out how title is held (Chapters 5, 6).

File federal estate tax return (IRS Form 706):
(1) if gross value of estate exceeds estate tax exclusion amount, or (2) if decedent was married and claiming deceased spouse’s unused exclusion amount (Chapter 7). 

Use procedures to transfer or collect non-probate assets.

   Collect assets passing to named beneficiaries by beneficiary designation—such as insurance, retirement, and death benefits (Chapter 2).

   Clear joint tenancy, pay-on-death, or transfer-on-death in name(s) of survivor(s) (Chapter 10).

   Trust administration procedures for assets held by trust (Chapter 12).

   Assets held as community property with right of survivorship (Chapter 15).

   For assets passing to surviving spouse or partner either by will or by intestate succession, confirm title to surviving spouse or partner with a Spousal or Domestic Partner Property Petition (Chapter 15).

If remaining estate is $150,000 or less, transfer assets using simplified procedures for small estates (Chapter 11).

If remaining estate is greater than $150,000, or if other complications exist, initiate court probate administration to transfer assets to beneficiaries (Chapters 13, 14).

The Taxable Estate

Although this book is primarily about settling an estate, we include some mention of taxes because estates over a certain value are required to file a federal estate tax return. Therefore, you should know how to compute the value of the decedent’s estate for tax purposes, which—not surprisingly—is called the “taxable estate.” Keep in mind that the property that must go through probate (probate estate) is not necessarily the same as the taxable estate. Not all assets are subject to probate, but they are all counted when determining whether estate taxes must be paid. In other words, the taxable estate includes all assets in the decedent’s control just prior to death. The taxable estate may include assets subject to formal probate, plus joint tenancy property, life insurance proceeds (if the decedent was the owner of the policy), death benefits, property in a living trust, and property in any other probate avoidance device. However, if any of the assets are community property (discussed in Chapter 4), only the decedent’s one-half interest is included in his or her taxable estate.

If the estate is large enough to require a federal estate tax return, any tax is computed on the net value of the decedent’s property (net estate). That is, the tax is determined by the value of all property, less any debts owed by the decedent and certain other allowable deductions.

Debts and Insolvent Estates

Creditors are divided into classes according to their respective priorities. (Prob. Code § 11420.) First priority is given to debts owed to the United States or to the State of California, such as various taxes. Those debts must be paid before other debts or claims. (Prob. Code § 11421.) Next in priority are administration expenses (attorneys’ fees, court costs, etc.) and, after that, funeral expenses, last illness expenses, judgment claims, and general creditors are paid, in that order. Each class is paid in full before going to the next class.

When you come to a class that cannot be paid in full, the payments are prorated. For example, if Creditor One is owed $5,000 and Creditor Two is owed $10,000 and only $1,000 is left, Creditor One gets one-third of the $1,000 and Creditor Two gets two-thirds. An accounting must be presented for insolvent estates in a formal probate court proceeding. If using small estate procedures (Chapter 11), the successors are responsible for paying the decedent’s unsecured debts out of the property they receive. The debts are paid in the same order, and the successors are not personally liable for debts that exceed the value of the estate property.

An “insolvent estate” is one that does not have enough assets to pay creditors in full. Insolvent estates are subject to special rules and we do not include specific details here. Usually you must consult an attorney.

Estate Taxes

Most estates will not owe estate taxes. A person who dies in 2018 may own assets worth up to approximately $11.2 million without owing any federal estate taxes. This exclusion amount will rise with inflation. Estates having a gross value over the exclusion amount must file a federal estate tax return. The tax is computed on the net estate after certain allowable deductions have been taken.

If the net estate is under the exclusion amount, a return must still be filed if the estate has a gross value over the exclusion amount, although no tax may be owed. For example, if someone who dies in 2018 has a gross estate of $11.5 million and debts of $400,000, a federal estate tax return must be filed, even if the debts reduce the net value of the estate to less than the exclusion amount. Also, if the decedent was married, you may choose to file a federal estate tax return for an estate under this amount to claim “portability” of the decedent’s unused exclusion amount for the surviving spouse’s estate. We discuss federal estate tax in more detail in Chapter 7.

California does not impose its own inheritance tax or estate tax.

CAUTION

Pay taxes first. Although most estates don’t have to worry about federal estate taxes, if yours is a large estate for which federal estate taxes are due, the taxes should be paid before property is transferred to the people who inherit it. Many wills set aside money for the payment of taxes.

Federal and state income tax returns for the decedent’s last year and sometimes for the estate (if there is a formal probate) must also be filed. (See Chapter 7.)

Do You Need an Attorney?

Being the estate representative, in itself, is an important job that can provide satisfaction of handling the decedent’s estate with care. You will have responsibility for assembling assets, paying bills, managing the assets of the estate, and ultimately making distributions. The law does not require you to hire an attorney to assist you to settle an estate.

All of that said, probate is a legal process with unique rules. Hiring a lawyer who has the training and experience to maneuver through the relevant laws and procedures can make the process more smooth. Having a professional as a guide can allow you to focus on your own responsibilities with less stress.

If the estate is simple, if you have the time and desire to devote to learning the required procedures and following through, and particularly if you are the only beneficiary, you might choose to proceed without a lawyer. This book provides guidance and information on the process to help you recognize situations that may require legal assistance.

Complications that require special knowledge or handling may crop up even in an otherwise simple estate. Some examples are:

Ambiguities in the will. For example: “I give $50,000 to the poor children in the County Hospital.” This would raise several problems. Does “poor” mean low income or just unfortunate enough to be in the hospital? And what did the decedent intend when it came to dividing the money? Is it to be divided among all the children in the hospital, or did the decedent intend to set up a central fund to be used to make life a little easier for all kids in the hospital?

Contested claims against the estate (for example, a surviving spouse or domestic partner who claims a community property interest in property left by will to someone else);

The decedent’s unfinished contracts (for example, a sale of real property begun but not completed prior to death);

Insolvent estates (more debts than assets);

Claims against the estate by people who were left out or think they were given too little; or

Substantial property given to a minor, unless legal provisions to handle this are made in the will.

In a probate court proceeding, standard attorneys’ fees have been set by law and are based on a percentage of the gross estate (the gross value of the assets that are subjected to probate). It’s important to understand, however, that even though allowed fees are set out in the statute, you have the right to negotiate a lower fee with your lawyer. In other words, think of these statutory fees as the maximum the attorney is allowed to charge, and negotiate downward from there, considering the particular circumstances of the estate. On the other hand, for a particularly complicated estate needing out-of-the ordinary legal services, the lawyer can seek court approval for additional compensation.

The formula for computing attorneys’ fees in a formal probate court proceeding is found in California’s Probate Code Sections 10810 and 10811. The fee is calculated as follows:

4% of the first $100,000 of the gross value of the probate estate

3% of the next $100,000

2% of the next $800,000

1% of the next $9,000,000

0.5% of the next $15,000,000, and

a “reasonable amount” (determined by the court) for everything above $25,000,000.

For example, in a probate estate with a gross value of $150,000, the fee set by statute is $5,500; in an estate with a gross value of $200,000, the attorney fee is $7,000, and so on. Some circumstances may allow you to negotiate a lower fee with an attorney. For example, if a probate estate contains only one piece of real property, perhaps a home worth $600,000, the statutory attorney fee would be $15,000, even if the home might have a substantial mortgage that reduces the decedent’s equity to only $150,000. An attorney may be willing to accept a lesser fee, particularly if the estate has no complicating factors.

Attorneys’ fees in a formal court proceeding are paid out of the estate after being approved by the court, usually towards the end of the probate process. Chapter 16 provides information about working with an attorney.

If an estate doesn’t require formal probate because it can be settled in another way, such as a community property transfer to a surviving spouse or domestic partner or a joint tenancy termination, a statutory fee does not apply. In these situations, an attorney will bill for his or her time at an hourly rate, which commonly varies from $200 to $450 an hour.

Example: Returning to Harry’s estate for a moment (discussed above), if a lawyer were hired to probate Harry’s estate, the attorney’s fee could be up to $13,000, computed on a gross estate of $500,000. Let’s assume that Harry’s will left all of his property to his daughter, Millicent, and son, Michael, and one of them, acting as executor, probated Harry’s estate without an attorney and also waived the executor’s fee. The entire job could be accomplished for the cost of administration expenses only, which would amount to about $2,000 (including filing, publication, certification, and appraisal fees).

Executor’s Fees

In a probate court proceeding, the court appoints a personal representative to handle the estate, called either an “executor” (if there is a will) or an “administrator” (if the decedent died without a will or without naming an executor in his or her will). This person is entitled to fees, called the estate representative’s “commission.” These fees are set using the same statutory formula as for the attorney, see above. The estate representative cannot be paid from the estate until approved by the court, usually towards the end of the probate process. Because the commission is subject to income tax, close family members or beneficiaries who serve as executor or administrator sometimes choose to waive the executor’s or administrator’s fee.

 

When a friend or loved one dies, the natural grief process can make administrative tasks particularly challenging. Participating in the process of settling an estate, however, sometimes becomes a tangible way to approach the grief. Whether or not you choose to get legal assistance from the start, learning about the process, organizing relevant information, and proceeding in a responsible, diligent way can honor the deceased and care for beneficiaries or heirs. This book can help with that process.

 

Forms

This Book Comes With a Website

Nolo’s award-winning website has a page dedicated just to this book, where you can:

DOWNLOAD FORMS - All forms in this book are accessible online. After purchase, you can find a link to the URL in Appendix C.

KEEP UP TO DATE - When there are important changes to the information in this book, we will post updates

And that’s not all. Nolo.com contains thousands of articles on everyday legal and business issues, plus a plain-English law dictionary, all written by Nolo experts and available for free. You’ll also find more useful books, software, online services, and downloadable forms.

Customer Reviews

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Now I know what's going on by Patrick C.
Answered all my questions, a great resource. (Posted on 3/29/2018)

Very Helpful by Anonymous
Excellent instructional book on probate law and on processing all the steps required to file the necessary paperwork with the courts. It does an terrific service for novices who lack legal experience. Down to earth instructions (Posted on 3/20/2018)

This book is what NOLO is all about - a reference for real people, with real issues, written in real English by Anonymous
Book is very thorough and helpful to convert what is a daunting prospect for the uninitiated into simple steps. However a 2017 update is needed, as the Judicial Council has updated the all-important Petition for Probate, so many of the reference numbers to the form DE-111 are now incorrect, requiring one to sort back and forth from the old form to the new one. I hope NOLO can find someone as painstaking and sympathetic as Ms. Nissley to carry on her work. (Posted on 3/20/2018)

mostly thourough... by Anonymous
This is certainly a very useful resource. The help in knowing which forms and how to fill them out was worth the price. Also does a great job of covering a variety of situations very thoroughly. This would be a good resource in handling a case much more complex than what I'm dealing with, or one much smaller. However, there are some holes and confusion in dealing with this ultra simple case where the executor is also the sole heir. After scouring the book, I found one sentence talking about a sole heir and so far about 5 questions that aren't answered.
Also, maybe its just the local court here, but after studying the book and doing the first round of paperwork exactly as NOLO suggests, the court said "you are missing half of what you need, you should get the NOLO book so you know what your doing". Mostly just hurt my pride and confidence in myself and the book and wasted a lot of time.
All in all a great resource that I highly recommend. I'd take the problems and frustration I've had over the alternative of a lawyer any day.
The accompanying website doesn't have much to offer. A forum or Q&A resource would be nice instead (but I understand why that would be a difficult option to offer) (Posted on 3/20/2018)

The only way to start to handle an estate. by RICHARD B.
After my son passed away without a trust or will I needed help in getting his estate settled. This book provided me with the information and forms necessary to handle what I could on my own and when it was time to bring in an attorney. Well worth the price to get things rolling. (Posted on 3/20/2018)

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