Probate is a legal procedure in which the estate of the deceased is inventoried and distributed according to state law. (A Living Trust can help you avoid this - see below). The probate process applies to estates with assets of as little as $100,000, or a house with a market value (not equity) of over $20,000. Therefore, given the price of homes in California, if you own a house, your beneficiaries will have to go through this process.
Probate in California is a long and complex proceeding which can also be very expensive. Consumers, as well as attorneys, describe the procedure as the “agony” of probate. To give you an idea: an estate of $400,000, which might include a home worth $275,000 (with or without a mortgage or deed of trust against the property—it doesn’t matter), household goods of $25,000, and miscellaneous CD’s and bank accounts totaling another $100,000 would amount to a $400,000 estate.
Costs for attorney and executor fees would be approximately $22,000. Additional costs would include court filing fees, probate referee fees, accountants, and appraisers as well. The fees for selling the property can be high and if any litigation is involved, the costs could skyrocket.
How To Avoid Probate
A Living Trust is the best way to avoid probate. However, a Living Trust should be done by a knowledgeable attorney (who knows all of the “what if” questions to ask you) to be sure to avoid probate. Having an incompletely funded Trust or one with faulty language can be worse than no trust at all.
The Probate Court (which you were seeking to avoid) has jurisdiction over such “flawed trusts” -- and your loved ones would be worse off than if you had no Trust at all.
If you are married you can avoid a full probate on the first death by holding assets as community property with right of survivorships. However, either way, the beneficiary will go through a full probate on the second death.
Probate can be avoided by holding assets as joint tenants. Click here to see an article on the negatives.
Read more about specific questions on how to avoid probate.