PROBATE

Published on: March 11, 2011

Where Do You Open a Probate Estate or Administer a Trust?

A family member has died and you have to open a probate estate (if he died with a will or with no estate plan) or administer the decedent’s trust (if he had created a revocable living trust). In what county do you open the estate?

The county where an estate is handled is the county where the decedent was domiciled. Domicile is the permanent residence of an individual. In most cases, it is clear where the decedent was domiciled but in a few instances it may not be so clear.

If a decedent died in a hospital while on vacation, from accident, surgery, or illness, his domicile is still where he lived permanently, so if that is San Diego county, then the San Diego Probate Court would be where the will is admitted to probate or San Diego would be where the trust is administered. On the other hand, what if the decedent decided to move to another county to live with relatives or to live in an assisted living facility? Then domicile has to be determined by looking at such factors as where the decedent owned property; where was the residence of the decedent; where did the decedent receive mail, where was the decedent registered to vote; in what state was the decedent’s driver’s license issued. These factors may lead a court to conclude that the intent of the decedent was to change his domicile to another county.

Published on: February 4, 2011

Assets That Are and Are Not Subject to Probate

by Scott C. Soady

Probate in California is the legal process whereby the Probate Court supervises the distribution of assets of someone who has died with a will OR a person who has died without a will or turst (i.e. intestate). The Court also determines the validity of creditor’s claims and sees that taxes are paid. After all the decedent’s assets are inventoried and valued, and debts and taxes paid, the Court distributes the decedent’s assets in accordance with the will or in the case of no will, according to the Probate Code provisions for intestate heirs.

What assets are subject to probate?

1. Assets that are in the name of the decedent.

Published on: January 4, 2011

How the Lack of an Estate Plan Can Affect Your Loved Ones

by Scott C. Soady

If you do not have a will, or better yet, a trust, your estate will be distributed according to the laws of “intestacy” set forth in the Probate Code. There may be a difference between how your estate is distributed according to your wishes and how it will be distributed pursuant to the Probate Code. Here are some disadvantages of intestacy you might want to consider:

1. The Court chooses the individual who will distribute your estate. The Court will appoint someone called the administrator to manage your assets and distribute them to your heirs at law. Maybe the person appointed is the person you would have chosen anyway but maybe not. Maybe two or more individuals will apply to the Court to be named administrator causing discord in the family.

2. The process of probate takes a long time. When you die without a will or a trust, the probate process here in San Diego typically can take a year or longer. The administration of a trust usually progresses much faster. If there are issues that need court intervention, the trustee can petition the Court for assistance, but most trust administrations are handled without going to court.

Published on: December 7, 2010

Administration of a Missing Person’s Estate

by Scott C. Soady

What happens when someone dies and they have property in California but the decedent can’t be found? Sometimes people go missing and are never found. Sometimes it is asssumed that someone has died in an aviation accident with no remains found. Sometimes even criminals suddenly disappear with a suitcase full of money, never to reappear. That happens to their estate?

For the immediate needs of maintenace and protection of property, a trustee can be appointed for an individual who has been missing for 90 days and is presumed to be alive. What if the individual is presumed to be dead and has been missing for a long time? The famiy needs to be able to take care of debts and take over other financial matters of the decedent.

California Probate Code section 12400 – 12408 provides a method of administration and distribution of an estate of a decedent who has been missing continuously for 5 years. This “presumed dead” petition must be filed in the county where the missing person last lived if the person resided in California. If the decedent was not a California resident, the petition can be filed wherever the decedent owned property in California. The petition must state the time and circumstances of the disappearance, last known residence, and a description of what search and investigation occurred concerning his or her disappearance. The Court determines at a hearing whether the person can be presumed dead or there should be further investigation. If the Court finds that the missing person is presumed dead, the Court can also determine the date of death and appoint a personal representative to administer the estate in the same manner as any other decedent’s estate.

Published on: November 3, 2010

Cost of Probate Increasing in San Diego

by Scott C. Soady

As of November 1, 2010, the cost to file for probate is increasing to $395. This fee is set by the Court and the size of the estate is not considered. What other costs are involved in probate?

The person petitioning the Court to be appointed administrator or executor will also have to publish a notice in the local newspaper, showing the decedent’s date of death, who is petitioning to administer the estate, and the contact information of the executor/ administrator so that creditors and other interested persons can contact them. The cost of publication is approximately $350 – $500.

Once the assets have been inventoried, they need to be appraised. Usually this is done by the probate referee who charges approximately 1/10 of 1% of the appraised value of the asset. If there are multiple real properties or items of personal property that have to be appraised, there may be several appraisals, adding to the cost of probate.

Published on: October 24, 2010

Who Pays a Decedent’s Debts?

by Scott C. Soady

Many people ask whether as family members they can be responsible for a loved one’s debts. Often debts can rapidly accumulate especially if a decedent has had a long illness.

If the decedent left an estate that is solvent, the estate will pay the expenses of a last illness and any debt. The personal representative (trustee, executor, or administrator) will be the one to pay off the debts from the assets of the estate before any distributions are made to beneficiaries. A solvent estate is one where the value of the assets is more than the debts. The personal representative if the decedent had a trust will be the successor trustee. The personal representative if the decedent had a will is the executor. If the decedent had no will or trust, the personal representative will be the administrator.

If the estate is not solvent, it means there are not sufficient assets to pay all the debts of the decedent. If there are sufficient assets to pay some of the bills, the bills will be paid in a certain order. That order of payment is as follows:

Published on: October 8, 2010

Ancillary Probate Can Increase the Cost of Probate

by Scott C. Soady

Probate is the legal process instituted in the Probate Court to determine the beneficiaries of a person’s estate and distribute the probate assets to the person’s heirs or beneficiaries. Ancillary probate is an additional probate proceeding that is required in addition to the state where the decedent lived and died usually because the decedent owned property in another state. That property could be real property, a car, boat, farm, vacation home or timeshare. The laws of the state where the property is located will determine the costs of the ancillary probate and in some cases, who receives the property after the ancillary probate.

One of the disadvantages to having an ancillary probate in addition to the one in the home state is that it will add to the total cost of administering the probate estate because of additional filing fees, appraisal fees, and attorneys’ fees. Also if the probate estate is an intestate one, that is, a probate because there was no will or trust, the persons entitled to receive distributions could be different than those entitled to inherit in California.

For example, in California, the estate of a person dying with no will and leaving a spouse and one child would be distributed one-half of the community property to the spouse and one-half to the child. As to separate property, it would be distributed one-half to the surviving spouse and one-half to the person’s child. In New York, if a decedent is survived by a spouse and one child, the surviving spouse would receive $50,000 and one-half of the residue of the estate; the child would receive the balance.

Published on: September 27, 2010

Probate and the Heggstad Petition

by Scott C. Soady

In many past blogs, we have emphasized the importance of transferring all assets that are trust assets into the name of your revocable living trust. This is important because if you pass away and there are assets in your estate that were not transferred into your trust, those assets will be subject to probate. Probate can be long and costly and avoiding probate was probably one of the reasons you created a trust.

When you create a trust with Scott C. Soady, A Professional Corporation, LLP, the assets that are being transferred into your trust will be listed on your Schedule of Assets. This would include any real property, bank accounts, mutual funds, stocks, bonds, business interests, and personal property. After your trust is in place, you may acquire additional assets, open a new bank account, buy a second home or a different home, or purchase other assets that should be transferred into the trust. All of these “new” assets should be titled in the name of your trust and your Schedule of Assets updated.

If an asset is not properly transferred into the name of your trust, there potentially may be a way to avoid probate proceedings. There is an action called a Heggstad petition, named after a 1993 case entitled Estate of Heggstad. With this petition, it may be possible for the Court to determine that an asset not actually titled in the trust at the time of death is in fact a trust asset. The court looks to the Schedule of Assets to see if the asset was listed and if so, infers there was an intent to transfer it. If the court grants the petition, the court orders that the asset is a trust asset. The Heggstad petition thus avoids the full probate of the estate.

Published on: September 23, 2010

Attorney’s Fees in Calfornia Probate

by Scott C. Soady

Attorney’s fees for probate in California are set forth in the Probate Code Section 10810. The maximum fees that can be charged by the probate attorney are:

4% of the first $100,000 3% of the next $100,000 2% of the next $800,000 1% of the next $9 million.

The value of the estate for purposes of attorney’s fees is the gross value of the estate, so that if the decedent owned a home valued at the time of death at $500,000 with a $300,000 mortgage, the $500,000 figure is used.

Published on: August 31, 2010

Why Does Probate Take So Long?

by Scott C. Soady

In California probate proceedings are governed by the Probate Code which sets forth certain time limits. Once a petition for probate is filed, you will receive a date for the first hearing in which an administrator or executor is appointed. The hearing is often 2-3 months after the petition has been filed. Once the representative has been appointed, notice has to be given to creditors of the decedent. Creditors have four months after publication of the notice of probate or 60 days after receiving actual notice, whichever is later to file a claim. Then the process begins of collecting and valuing all of the decedent’s asset, paying the debts, taxes, possibly liquidating some assets, and finally distributed the assets to the heirs or beneficiaries.

The normal time for probate in San Diego county is between 9 months and 18 months. There are a number of factors that may make the probate process take longer. Some of these are:

1. Many beneficiaries