Probate as you probably know is the court supervised process for transferring an estate to the beneficiaries of a will or transferring an estate to the heirs of someone who died without a will or a trust. Take the following quiz to see how much you know about wills and probate:
1. Probate only applies if you have a will. Answer: FALSE If you die with a will, there will be a probate. If you die without a will and don’t have a trust either, there will be a probate.
2. Probate applies to your entire estate. Answer: FALSE Probate is necessary for your probate assets. Some assets are not considered probate assets. Examples are assets which have a named beneficiary like life insurance, payable on death accounts, and property you own in joint tenancy with a right of survivorship.
3. If you have a revocable living trust you always avoid probate. Answer: FALSE Assets which are transferred into your revocable trust do avoid probate however many people create a trust and fail to properly fund it because they forget to title their assets in the name of the trust. The trust document is useless if you die with assets which should be in the name of your trust, and are not. Assets left out that are over $100,000 will be subject to probate.
4. If you die without a will and are married, everything goes to your spouse. Answer: FALSE.
In California if you die without a will (ie.intestate) your estate will be divided among your spouse and your children.
5. A will is cheaper than a trust. The answer to this question is, in most cases, FALSE.
It is true that a will is usually less expensive to establish than a trust, however a will has future costs. When you die with a will, the distribution of your estate will be through the probate courts. Your estate will incur statutory probate fees for the probate lawyer and for the executor. A trust is a little more expensive to prepare initially but your beneficiaries will not have the fees of probate.
For more information on probate or to create a will or a trust, contact the estate planning lawyers at Scott C. Soady, A Professional Corporation.