The probate process is the way a person’s estate assets are officially distributed to their heirs and beneficiaries through the California court system. Those assets can include cash, personal property, and real property. Basically, the probate procedures require several steps before the probate can be closed. Estate assets cannot be distributed to heirs or beneficiaries until the probate process is completed. All of the necessary steps for probate in California are governed by the state’s probate law. Here is what you need to know to understand probate law in California.
Not all assets are subject to probate
Probate is typically reserved for assets that at one’s death are solely in the name of the decedent, such as a home or bank account. If there is another name on title, say as a joint tenant, it will pass to the surviving joint tenant on the death of the the other joint tenant. Assets held as tenants in common, however, may, depending on their value, have to be probated.
Assets that have direct beneficiaries such as individuals or charities do not have to be probated. This is the case with life insurance, annuities, and certain retirement accounts such as IRAs, 401k’s, etc. Other financial institution accounts may also have designated beneficiaries.
Assets held in a living trust also do not have to be probated. The trustee of the trust simply distributes the asset to the beneficiaries set forth in the trust document.
For estates not including real estate that total less than $150,000, there is a summary procedure that may be used. If it includes real estate but is less than that amount, other summary procedures may also be helpful.
A personal representative needs to be appointed first
In cases where a probate is required, according to California probate law, the proceedings cannot begin until the court appoints the personal representative to manage the estate and oversee the process. Typically, the last will and testament includes provisions that name an executor. However, if there is no will or the will does not include that provision, then the court will be required to appoint someone to serve as the administrator. Initially, the executor/administrator will be responsible for taking possession of the estate property and then carrying out the necessary steps before finally distributing the property to the proper individuals.
A petition must be filed in probate court
Probate law requires the filing of an initial petition with the probate court before the estate is opened and the proceedings can officially begin. Pursuant to California probate law, that petition must be filed with the California Superior Court in the county where the deceased resided at the time of his or her death. The purpose of the petition is to trigger the court to schedule a hearing, typically within thirty (30) days.
Notices need to be issued to heirs and creditors
After the petition has been filed in probate court, a notice of the hearing must be published at least three times in a local newspaper. The notice must also be mailed to everyone named in the last will and testament, along with all legal heirs of the deceased. Notice must be given to any potential creditors, as well.
Wills may need to be proven in court
If a will exists, the executor may need to “prove” the will which essentially means to establish the validity of the will. This step may not be required if the will is considered a “self-proving” will. That type of will contains a specific provision or an affidavit from all of the witnesses that makes it unnecessary to prove the validity of the will.
The property of the estate must be collected and inventoried
One of the basic duties of an executor is taking possession of the estate property that is subject to probate. A common misconception is that all property is subject to probate, but that is not the case. If title to an asset needs to be transferred into someone else’s name, making that transfer is the responsibility of the executor. The court will usually require an inventory of the estate property, as well.
Valid creditor claims need to be paid before distributions are made
Once notice of the death has been given to creditors, a request for payment of legitimate debts are made by submitting a claim. Under California probate law, creditors are required to submit their claims within four months of the appointment of the executor. Those claims that are determined to be valid will be paid from the estate before other distributions are made to heirs or beneficiaries. Creditor claims can include bills and funeral expenses.
If the estate owes taxes, they must be paid on time
In the often rare case where an estate owes estate taxes, the executor must make sure that those taxes are paid before any other distributions are made. While in most cases the executor will not be held personally liable for unpaid estate taxes, if the property is distributed before taxes are paid and there are insufficient assets to cover those taxes, then the executor may be legally liable.
The probate court will close the estate when the process is complete
The final step in probate is closing the estate, which involves submitting an accounting of the executor’s transactions with regard to the estate. An executor must file a petition with the probate court. The petition should summarize the estate and provide a report of all actions taken. The petition must also specify the fees to be paid to the executor and the estate attorney, if applicable.
Download our FREE estate planning checklist today! If you have questions regarding the probate process or any other probate issues, contact the Northern California Center for Estate Planning and Elder Law for a consultation, either online or by calling us at (916) 437-3500.
Timothy P. Murphy
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