What Is Probate? The probate court in California serves several purposes. The most typical is called a probate proceeding, which provides for administration of the estates of people who have died. Guardianships, conservatorships and trust matters, however, are also handled by the probate court. This means that the same court which appoints a conservator for an incapacitated individual may, several years later, administer that individual's estate after death.

What Is a Probate Proceeding? A probate proceeding is a court-supervised process ensuring the transfer of assets, upon an individual's death, to the beneficiaries named in his will. It also sets in motion a process which determines the validity of a creditor's claim against any given estate in a relatively short time.

A probate administration is begun when a petition is filed with the court, usually by the entity named as executor in a decedent's will. The will is admitted to probate after notice is given and a hearing takes place, at which time an executor is appointed. If a person dies without a will, or dies "intestate," his estate is still likely to undergo probate administration, with whomever the court appoints to handle the estate being named as "administrator." The exception to this would be if an individual's assets at death do not include real property and are valued at less than $100,000. In this case, the beneficiaries of the will could choose to follow statutory procedure to transfer assets, minus debts and expenses, without a formal, court-administered probate.

What Are the Benefits of Probate? Probate does have certain advantages. Primarily, it guarantees that a deceased individual's assets are verified and distributed, under court supervision, as he or she intended. Also, once the statutory period for examining and satisfying creditor claims passes, (usually four months after an executor is named), it is extremely difficult for creditors or others to claim any interest in the estate. As a result, probating an estate decreases the likelihood that a deceased professional (a doctor, accountant or attorney, for instance) will be sued posthumously. The most obvious benefit, of course, is the assurance that all the actions and accountings of the executor will be reviewed and approved by the probate court.

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What Are the Drawbacks of Probate? Many people seek to avoid probate, and they have valid reasons for doing so. Some individuals are concerned about lack of privacy, due to the fact that the net worth of a probated estate becomes public record, as does the entire estate plan. In a number of cases, time becomes a negative factor as well. Normally, a formal probate takes six months to a year; however, probate actions can sometimes extend to several years or even decades, though this is extremely rare. In general, distributions can be made more quickly pursuant to a living trust. Additionally, the expenses incurred in probate may be greater than they would have been under a living trust. Of course, even if probate is avoided, an attorney and/or accountant will frequently be hired to administer a trust or non-probate estate, so a fee should be expected. Naturally, trust administration is most successful when conducted by a representative with specific knowledge and experience in probate law.

Must Life Insurance or Retirement Benefits Go Through Probate? No. Benefits are remitted directly to a named beneficiary. IRA's, Keoghs, and 401(k) accounts transfer funds automatically to the individuals who are named as beneficiaries. Pay-on-death bank accounts or "in trust for" accounts with named beneficiaries also go directly to beneficiaries without probate. However, in cases where the value of the decedent" entire estate was larger than the estate tax exclusion amount that year, the beneficiary of these funds may owe estate taxes. In addition, beneficiaries of any income deferred account (such as an IRA) will owe income tax on the withdrawal of funds from such an account. There are options to minimize or delay the income taxes. Beneficiaries of such accounts should consult a knowledgeable attorney for information and advice.

What About Living Trusts? Must They Go Through Probate? No. Any property where title is held by a living trust goes directly to the beneficiaries, once the trustee completes his/her trust administration responsibilities.

Do I Have to Serve If I Am Named as Executor of an Estate? No. When a named executor does not wish to serve, the court will appoint the alternate executor to serve in his/her stead. In cases where no alternate executor is named, the court will appoint a personal representative after considering the wishes of the next-of-kin and/or beneficiaries.

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Are Executors Reimbursed for Their Services? Yes, the executor, administrator, or personal representative usually earns a statutory fee equal to 2-4% of the gross value of the probate estate, as well as being reimbursed for most out-of-pocket expenses. As the estate size increases, the percentage of the statutory fee decreases. Of course, all fees and expenses will require approval by the court. What's more, the court can allow additional fees where extraordinary circumstances exist.

What are the Duties of a Personal Representative? A personal representative must first ascertain whether there are probate assets. Having done that, he or she must identify those assets and manage them during probate; receive payments owed to the estate; establish an estate checking account to hold funds owed the decedent; determine who gets what and how much under the will; in the absence of a will, locate heirs and calculate their share; value estate assets or have them appraised; furnish legal notice to creditors; confirm the legitimacy of claims made on estate; remit payment for funeral bills, unpaid debts and verified claims; utilize estate funds to satisfy continuing expenses; manage daily details; file tax returns and pay taxes; distribute property to those parties named in the will or qualified heirs if there is no will; file distribution receipts; and bring all final details to a conclusion.

What Happens When a Personal Representative Fails to Fulfill His or Her Responsibilities? Compensation may be lowered or denied by the court, and the personal representative may even be billed for damages caused. A personal representative may be deemed accountable for the following: Poorly managed assets; overpayment of creditors; negligence in collecting claims and money due the estate; the unauthorized sale of an asset without authority or at an unsuitable price; distribution of property to the wrong beneficiaries; distribution of property without having paid all claims by creditors; failure to file tax returns on time, etc.

Must An Attorney Be Used for the Probate Process? No, it is not required. However, using an attorney is generally recommended where the estate involves any degree of complexity. A good lawyer can help you meet deadlines and avoid mistakes and delays.

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What Are the Main Stages Involved in the Process of Probating a Decedent's Estate?