Probate 101… What Happens When Someone Dies without a Trust

Many people are unfamiliar with the various steps required before distributing an estate to its heirs and beneficiaries.

When a decedent dies without setting up a living trust a probate proceeding must be filed with the court. The Probate Court Procedures are required whether the decedent had a will or not, unless the estate is under $150,000 and doesn’t contain real estate. Property may then be transferred to the heirs by using an affidavit. The only way to avoid probate with real property and/ or over $150,000 in assets is to have assets transferred into a trust. The following is an overview of Probate.

In order to streamline the process, hiring an experienced probate attorney is very helpful. Probate attorneys are familiar with the process of transferring real estate and personal property, as well as the tax accounting aspects of distribution of the estate, such as the estate tax. They will prepare and file the necessary papers with the court and obtain a court order that distributes the property in the estate to the heirs and beneficiaries.

 Here’s an explanation of the process:

            When there is a will, an Executor is the person designated to administer the decedent’s estate. When there is no will, no Executor is named in the will, or the Executor is unable to act, an Administrator is appointed. These positions are considered Personal Representatives.
             
            The Personal Representative must collect, conserve, manage and control the assets of the estate, pay the decedent’s debts and taxes due and distribute the estate’s worth when there is a will. When there is no will, the estate is distributed by the laws of Interstate Succession. Interstate Succession generally states who will inherit your estate. This usually includes spouse and children first. If your spouse or children are not alive then relatives are the next to inherit. If there are not relatives, the property goes to the state.  
             
            The administration process of the estate begins when the Will, or no will, has been admitted to probate by the Superior Court and Letters Testamentary or Letters of Administration are issued. These letters give the Personal Representative the ability to gather the decedent’s assets into their estate.
          
             In California, the law requires notice from the estate to all creditors of the decedent to file their claims. If this notice is filed with the court and then published in a local newspaper, creditors have a window of four months to file their claim with the court. If there is no claim within the four month window, the estate does not have to pay.
            
             The personal representative must also create an inventory of the assets owned by the decedent when they die. Tax returns and accounting that need to be filed with the court come from this inventory. The inventory and non-probate assets, such as life insurance, joint tenancy property and trust assets are required for tax purposes, so they must be appraised.
           
             The estate tax is placed upon the transfer of property at death. Generally the estate is able to pay for the tax but it may be charged to the beneficiaries of the estate. Returns are filed for decedent’s estates with a gross value over the estate tax exemption amount. A gross value includes assets in the probate estate and may also include life insurance, jointly-owned property and assets that were given by the decedent. The estate tax must be paid by 9 months.
             
             The length of the probate process depends on the complexity of the estate. It may take only 6 months, but it can also continue on for years. In order to avoid the probate process, people implement a living trust before they die.
            
              Personal Representatives and the probate lawyer’s are compensated for the work, in California, by collecting a percentage of the gross estate.
             
       Living Trust’s help reduce the headache of having to deal with a prolonged probate. Living Trust’s allow for the nearly immediate distribution of assets, and generally cost less than a probate.

Take advantage of a free phone consultation or appointment for a free 30 minute consultation to review your individual situation and determine if you would benefit from our experience and legal services.

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