WHEN someone dies without a Living Trust, the decedent’s estate is subject to a probate. Probate simply means “to prove the will”. The process is designed to prove that the decedent actually had died and that the will presented for “proving” is actually the valid will.
Today, it probably is best to describe probate as the court-supervised process by which a decedent’s assets are collected, assessed, and distributed to beneficiaries. Due to the formal process involved, it usually takes between 6 to 18 months to finalize it.
The process also requires that all creditors of the decedent be notified and given the chance to make a claim against the decedent’s estate.
Disadvantages of probate
Expensive- Probate can become quite costly, as illustrated in the probate fees below.
Lengthy – The average length of time for probate to get finalized is between 6 to 18 months, as previously mentioned.
Public – Probate is a public process. Anyone, after paying a fee to the court clerk, can access probate files, which includes all financial information of the decedent or nowadays, it can even be more conveniently accessed online.
Restrictions – Since the court controls the process, disbursement of money to the beneficiaries can possibly get slower and more complex than you would have wanted it and are often subject to court approval.
Currently, California Probate Code §10800 allows compensation for the Executor (sometimes called Administrator or Personal Representative) and for the Attorney for the Executor of an Estate as follows:
• 4% on the first one hundred thousand dollars ($100,000).
• 3% on the next one hundred thousand dollars ($100,000).
• 2% on the next eight hundred thousand dollars ($800,000).
• 1% on the next nine million dollars ($9,000,000).
• ½% on the next fifteen million dollars ($15,000,000).
• Above twenty-five million dollars ($25,000,000), a reasonable amount to be determined by the Court.
Hence, based on the above, the Probate fee on an estate of $1,000,000 is equal to $23,000. But remember that both Executor and Attorney could be paid the same amount, which could increase the probate cost to $46,000 and that is not including court filing fees!
It is no surprise that people would want to avoid probate as much as they possibly can.