California Probate Laws – An In-Depth Analysis of California Probate Laws

The schedule below will help you to grasp the basics of California probate laws. Following the steps in order will help you to digest the pertinent information easily and memorably. Taking the time to browse through this table will help you to be fully prepared in the event that you will need to deal with the probate system and the complexities of California probate laws.

1. The Process of Probate – The process by which the courts administrate a deceased person's estate is called Probate. This applies if there is no trust, no will, and it also applies if there is a will left. The purpose of a person creating a trust is to avoid having their assets go into probate. California probate laws state that petitions for probate must be filed with the courts, and that creditors and beneficiaries informed. The assets of the estate are then listed by an executor (person nominated to administer the will by the decedent or the court), while the probate court appraises the value of the estate and settles any disputes regarding the estate. A final valuation is made, after which creditors are paid and the balance distributed amongst the inheritors. Probate normally takes between 8 and 10 months to settle (though it can take longer), and if funds are required by the decedents family during that time; California probate laws require a motion to be filed before the court.
2. Exemption from Probate – California probate laws allow for some exceptions to probate. They are:
   1. Living Trusts. One of the most popular ways to have your estate be exempt from probate is to create a living trust. This way your assets are owned by the trust with you as the chief beneficiary. California probate laws require however that, if real estate is owned by the trust the deceased's name must be removed from the property title by filing documentation with the county office. If the gross value of the trust exceeds $100,000, it may still be liable to probate.
   2. Joint Venture Ownerships. California probate laws dictate that any property co-owned by a married couple goes directly to the surviving spouse upon the death of the other. If the surviving spouse had no ownership of the property, filing a spousal petition may be a viable option to going through the full probate process. If there is no trust, to avoid probate completely there must be a will declaring the surviving spouse the full owner (100%) of the property.
   3. Estates Valued Below $100,000. Formal probate proceedings can be avoided if the gross value of the property does not exceed $100,000. This valuation must not include any debts, liens, or deeds of trust to qualify for probate exemption under California probate laws. There are particular items that needn't be included in the valuation such as:
      • Motor Vehicles
      • Community Property
      • Death Benefits and Life Insurance
      • Real or Personal Joint Tenant Property
      • Properties outside of California
      NB. Regarding the cases listed above, probate may sometimes be advisable, especially if there are strained or complex family relationships, complicated holdings, or challenges to the will or executor involved.
3. When no Will Exists – Dying intestate means dying without a will, when this happens California probate laws require the estate to be distributed in particular ways. If there is a surviving spouse they will receive; all jointly held property, the decedent's personal property as follows:
   • All if there are no other surviving parents or siblings or children of a deceased sibling
   • Half if there is one surviving child or grandchild
   • One half if there is a surviving parent or sibling
   • One third if there is more than one surviving child or grandchild
   The rest of the estate is then forwarded to the surviving children of the deceased, or if they are deceased, then their surviving dependants. If there are no surviving children or deceased children with surviving dependants, the remainder goes to the parents if they are living, and if not to the decedent's brothers and sisters.
4. Executor and Attorney Fees – California probate laws govern the fees for attorneys and executors which are based on the gross value of the estate. There are no deductions for debts, deeds of trust and liens etc. The calculation is based on a sliding percentage as follows:
   1. 4% on the first $100,000
   2. 3% on the following $100,000
   3. 2% on the next $800,000
   4. 1% on the next $9,000,000
   5. .05% on the next $15,000,000
   6. Any amount over $25,000,000 will be assessed by the court
5. Bonds – If there is no will designating an executor and stipulating that bond be waived, California probate laws state that the personal representative must post a bond guaranteeing that they will fulfill their duties in the case of:
   1. Being out of state. Court will require a bond in such a case even if it has been waived.
   2. If the will does not waive the bond, a written request to remove it may be filed by all interested parties
   3. Estates requiring a bond will have the amount set by the court. The amount will be equal to the amount of the value of all personal property, plus the amount of equity within the property, plus double the annual income of all property held by the estate.
   4. Bond premiums are governed by California probate laws and are usually one percent of the total value of the estate. Bonds will not be issued unless the personal representative is represented by a lawyer.

6. Appraisal and Inventory – An immediate requirement for a personal representative in order to avoid probate is to file an inventory of an estate's entire assets covered by probate. Any assets that are not subject to probate under California probate laws needn't be listed. Usually a referee is appointed to appraise the assets without prejudice, and though a waiver may be requested from the court, good reason must be demonstrated. The referee is compensated for his or her services by a commission to the value one tenth of one percent of the estate's total worth.
7. Dealing With Creditors – Creditors must be notified by publishing the petition for probate in a newspaper, and proof of publication filed with the court before the date of the hearing. Individual creditors must also be notified as such:
   1. 4 months after the date of appointment of the representative or
   2. 30 days after the representative was made aware of the creditor. California probate laws also require creditor notification to be proven before the court. There are also time limits for creditors to file their claims as follows:
      1. 4 months following the appointment of the personal representative
      2. 60 days after specific notice was given the creditor, and the creditor must also file his claim with the court and give a copy to the estate representative.
      3. Any lawsuits by creditors must begin within 12 months of the date of death, but the deadline will be extended if the claim was filed on time but settlement was delayed because of mitigating factors.
   Under California probate laws the allowance and rejection of claims must be executed as follows:
   1. The personal representative must file and serve the rejection or allowance, and if the claim is rejected the creditor must file a lawsuit in the appropriate court within three months of being served notice if said rejection. The personal representative must be notified of the lawsuit by the creditor.
   2. If a claim is not rejected by the personal representative within the 30 day period following the filing of the claim, the claim can be considered rejected and a lawsuit filed accordingly. The estate must remain open while there are any unresolved claims against it, therefore many creditors are content to wait for the personal representative to finally approve it, even if late.
   3. If a claim must be referred to a judge, a written agreement must be formed between the claimant and personal representative. The claim may then be heard without pleadings, jury, discovery, the ruling having the effect of judgment
8. Real Estate Sales and the Independent Administration of Estates Act – The greatest job that must be undertaken by the personal representative of an estate is the selling of real estate. This must be dome in compliance with California probate laws and the IAEA (Independent Administration of Estates Act). If the personal representative needs or wishes to sell the property it must be sold for at least ninety percent of its appraised value and with court approval. The one exception is in the case of the personal representative being given authority under the IAEA and is not being bought by him or herself. The ninety percent rule still applies and the request to carry out such a transaction under IARA authority can be made at any time. Any persons interested can raise objections to the transaction, but must show good cause as to why the deal shouldn't be made. Whatever the case, any interested parties must be notified of an intention to sell by the personal representative, and for the sale to go through, all parties involved in the estate must sign an agreement.

9. Report, Account and Petition for Distribution – The final accounting of the estate must be filed by the personal representative along with a petition for distribution and final report. When the estate retains sufficient monies to pay creditors, the rime for creditors filing their claims has passed, and the estate is ready to be closed, the personal representative can take these final measures. As with every probate process, these also are regulated by California probate laws and must be done accordingly:

1. If all persons entitled to receive property or other assets from the estate sign a written waiver, this process can be avoided.
2. The personal representative assumes responsibility for all financial transactions that take place under his term of appointment
3. Matters that are not self-explanatory must be explained in detail by the financial representative and a report filed with the court
4. The representative must petition for the approval of his or her actions, the final accounting, and compensation for themselves and/or the attorney , and final distribution of the estate.

Hopefully you are now a bit better versed in the complexities of California probate laws. There is no substitute however for the experience and expertise of a probate attorney. An attorney can guide you through all of the complicated procedures of probate, and ensure that while dealing with probate, you don't violate any California probate laws.