Probate

Will My Estate Go Through It?

All estates go through Probate.  Probate is a legal process that takes place after a person passes away. The issue is whether formal probate will be necessary.  Formal Probate is necessary when the total value of the estate is above $166,250*.

However, certain assets are exempt from your total probate estate.

  • Assets held in joint tenancy or as survivorship community property with their spouse
  • Assets held in a revocable living trust
  • Assets held in a payable-on-death account with a named beneficiary
  • Life Insurance/Annuity/Retirement Accounts with stipulated beneficiary

If the value of the probate estate is below $166,250 informal probate will apply. Informal probate allows inheritors to claim the assets with a simple sworn statement (affidavit) or a streamlined summary probate process. 

In California, a probate lawyer can charge a “statutory fee.”  Here are the current rates****:

  • 4% of the first $100,000 of the gross value of the probate estate
  • 3% of the next $100,000
  • 2% of the next $800,000
  • 1% of the next $9 million
  • .5% of the next $15 million
  • A reasonable amount (determined by the court) for any amounts higher than $25 million

****Cal. Probate Code § § 10810, 10811

In practice, this means that probate lawyers’ fees can be very high in relation to the amount of actual work done. Probate is usually a matter of filing papers; there’s no trial and there may be no court appearances at all. So, let’s say your probate estate contains a $600,000 house you own in your name alone, plus some bank and brokerage accounts and a car. The total value is $900,000. The attorney’s statutory fee would be $21,000—for very little paperwork. But wait, what if there’s still $200,000 to pay on the mortgage, reducing your equity to $400,000? The attorney’s fee would still be $21,000—it’s based on the gross amount of the probate assets, not what you actually own. California lawyers don’t have to charge this way—they can bill by the hour or charge a flat fee. They do it because the statutory fees are such a good deal for them. And the fees are only for ordinary work—if there’s something “extraordinary,” the lawyer can ask for a bigger fee.