Probate and Trust Succession

When a loved one loses legal capacity or passes away, his or her estate often goes through a court-managed process called “trust administration” or “probate.”  Probate courts handle trusts and estates of both incapacitated and deceased individuals. Whether in court or out, the process of estate succession is when assets and liabilities of a loved one are gathered, managed and distributed.

We have constructed our “Succession Process” that allows us to handle the exceptions in stride as we go through the steps required in all situations:

  • Before you engage our firm, we:
    • Help you to Gather the Estate;
    • Evaluate the Estate and identify complexities or concerns;
    • Meet with you in an Initial Visit; and
    • Provide a written agreement regarding fees, generally as a flat fee rather than an hourly rate.
  • Upon Engagement, we:
    • Create Legal Authority for the Trustee or Personal Representative;
    • Analyze and Test a plan for the estate administration, working collaboratively with your other advisors;
    • Meet with you to Present the Preliminary Plan and seek your approval; and
    • Build the Plan.
  • In Conclusion of our services, we:
    • Implement every last detail needed for the plan to come together; and
    • Confirm that all tasks have been completed.

Our clients know where they are in the process at all times, and can be assured that there is an end, and that we are taking every step possible as early as possible to ensure that the matter is concluded as quickly and efficiently as possible.

FREQUENTLY ASKED QUESTIONS

Do I need a “probate” or a “trust administration”?

The answer will depend on (1) the type of estate planning that a decedent had, if any; (2) the value of the assets owned by the decedent; and (3) the titling and beneficiary designations pertaining to the decedent’s assets. Sometimes an estate will require both a probate and a trust administration!

Titling of assets becomes very important as we determine what process or processes will be needed in your individual situation.  If your loved one owned his or her assets through a well-drafted and properly-funded living trust, it is likely that no court-managed administration is necessary, though the successor trustee will administer the assets following the same steps as required in a probate. 

How much does it cost?  How long does it take?

The cost and duration of probate can vary substantially depending on a number of factors, as every estate is unique. Some of the factors that affect how much it costs and how long it takes are (1) the value of assets; (2) the number of creditors; (3) the quality of the legal documents, if any; (4) whether there are disputes among family members; and (5) how organized the personal representative is.  Will contests or disputes with alleged creditors over the debts of the estate can also add significant cost and delay.  Common expenses of an estate include executors fees, attorneys fees, accounting fees, court fees, appraisal costs, and surety bonds. Many estates can be probated in 12 to 18 months, assuming there is no litigation involved.

Probate fees for “ordinary” services are set by California statute as a percentage of the gross value of all the assets of the estate:

  • 4% of the first $100,000
  • 3% of the next $100,000
  • 2% of the next $800,000
  • 1% of amounts over $1 million.

There is an additional fee for very large estates, and in addition, the attorney and the personal representative may be entitled to additional compensation for extraordinary services.

Our fees to administer trust estates are also calculated as a percentage of the estate, but at a much lower rate, since we can handle the work without court supervision. Typically, we can handle most trust administrations for a flat fee ranging from 0.75% to 1.5% of the value of the estate.

What happens if someone objects to the Will?

An objection to a Will, also known as a “Will contest” is a fairly common occurrence during the probate proceedings and can be incredibly costly to litigate.

In order to contest a Will, one has to have legal “standing” to raise objections.  This usually occurs when, for example children are to receive disproportionate shares under the Will, or when distribution schemes change from a prior Will to a later Will.  In addition to disputes over the tangible distributions, Will contests can be a quarrel over the person designated to serve as Personal Representative (the new word for “Executor”).

When Disputes Arise

When family members disagree on how to care for a loved one or how to administer their financial estate, it can create unneeded stress, anguish and damaged relationships. At Bay Laurel Law, P.C., we help families to mediate conflicts with the goals of improving relationships, minimizing expense and coming to a mutually-agreeable solution. If mediation is not possible, we also assist with probate, trust and conservatorship litigation.

Does probate administer all property of the decedent?

Probate is the process through which a court oversees the collection of assets, payment of debts and transfer of title from the name of a decedent to the names of the beneficiaries. 

Certain types of assets are what is called “non-probate assets” do not go through probate unless a special exception exists.  These include:

  • Property in which you own title as “joint tenants with right of survivorship”.  Such property passes to the co-owners by operation of law and do not go through probate.
  • Retirement accounts such as IRA and 401(k) accounts (so long as there are designated beneficiaries).
  • Life insurance policies with a proper beneficiary.
  • Bank accounts with “pay on death” (POD) designations or “in trust for” designations.
  • Property owned by a living trust.  Legal title to such property passes to successor trustees without having to go through probate.

Do I get paid for serving as a “Personal Representative”?

The Personal Representative, formerly known as “Executor” or “Executrix”, is reimbursed for all legitimate out-of-pocket expenses incurred in the process of management and distribution of the deceased estate.  In addition, you may be entitled to statutory fees, which are calculated as a percentage of the gross value of the probate estate as determined by a “probate referee”.  The Personal Representative has to fulfill his or her fiduciary duties on behalf of the estate with the highest degree of integrity and can be held liable for mismanagement of estate assets in his or her care.  It is advised that the Personal Representative retain an attorney and an accountant to advise and assist him with his or her duties.

Bay Laurel Law, P.C. assists clients in the San Francisco Bay area, from San Francisco south to San Jose, from Half Moon Bay east to Union City and as far off as Sacramento.