What is Probate?
The court process by which a Will is proved valid or invalid. The legal process wherein the estate of a decedent is administered. When a person dies, his or her estate must go through probate, which is a process overseen by a probate court. If the decedent leaves a will directing how his or her property should be distributed after death, the probate court must determine if it should be admitted to probate and given legal effect. If the decedent dies intestate—without leaving a will—the court appoints a Personal Representative to distribute the decedent’s property according to the laws of Descent and Distribution. These laws direct the distribution of assets based on hereditary succession.
In general, the probate process involves collecting the decedent’s assets, liquidating liabilities, paying necessary taxes, and distributing property to heirs. Probate procedures are governed by State law and have been the subject of debate and reform since the 1960s. The Uniform Probate Code (UPC) was first proposed in 1969 by the National Conference of Commissioners on Uniform State Laws and the House of Delegates of the American Bar Association. The prime focus of the UPC is to simplify the probate process. The UPC, which has been amended numerous times, has been adopted in its entirety by 16 states: Alaska, Arizona, Colorado, Florida, Hawaii, Idaho, Maine, Michigan, Minnesota, Montana, Nebraska, New Mexico, North Dakota, South Carolina, South Dakota and Utah. The other 36 states have adopted some part of the UPC but still retain distinct procedures.
The process of proving a will is valid and thereafter administering the estate of a dead person according to the terms of the will. The first step is to file the purported will with the clerk of the appropriate court in the county where the deceased person lived, along with a petition to have the court approve the will and appoint the executor named in the will (or if none is available, then an administrator) with declarations of a person who had signed the will as a witness. If the court determines the will is valid, the court then “admits” the will to probate.
A general term for the entire process of administration of estates of dead persons, including those without wills, with court supervision. The means of “avoiding” probate exist, including creating trusts in which all possessions are handled by a trustee, making lifetime gifts, or putting all substantial property in joint tenancy with an automatic right of survivorship in the joint owner. Even if there is a will, probate may not be necessary if the estate is small with no real estate title to be transferred, or all of the estate is either jointly owned or community property. Reasons for avoiding probate are the fees set by statute and/or the court (depending on state laws) for attorneys, executors and administrators, the need to publish notices, court hearings, paperwork, the public nature of the proceedings, and delays while waiting for creditors to file claims even when the deceased owed no one.
To prove a will in court and proceed with administration of a deceased’s estate under court supervision.
adj. reference to the appropriate court for handling estate matters, as in “probate court.”
In general, administration costs are 8-10 percent of the estate’s gross value.
Avoiding Probate in California
How to Save Your Family Time, Money and Hassle
Probate court proceedings (during which a deceased person’s assets are transferred to the people who inherit them) can be long, costly, and confusing. It’s no wonder so many people take steps to spare their families the hassle. Different states, however, offer different ways to avoid probate. Here are your options in California.
In California, you can make a living trust to avoid probate for virtually any asset you own — real estate, bank accounts, vehicles, and so on. You need to create a trust document (it’s similar to a will), naming someone to take over as trustee after your death (called a successor trustee). Then — and this is crucial — you must transfer ownership of your property to yourself as the trustee of the trust. Once all that’s done, the property will be controlled by the terms of the trust. At your death, your successor trustee will be able to transfer it to the trust beneficiaries without probate court proceedings.
*Many trusts are found to be invalid when not properly created, executed or funded. Using an experienced Estate Planning Attorney protects your assets and property. Using a do-it-yourself method (Legal Zoom, We the People, a paralegal, etc.) may create more issues than not having a trust.
If you own property jointly with someone else, and this ownership includes the “right of survivorship,” then the surviving owner automatically owns the property when the other owner dies. No probate will be necessary to transfer the property, although of course it will take some paperwork to show that title to the property is held solely by the surviving owner.
In California, these forms of joint ownership are available:
Joint Tenancy: Property owned in joint tenancy automatically passes to the surviving owners when one owner dies. No probate is necessary. Joint tenancy often works well when couples (married or not) acquire real estate, vehicles, bank accounts or other valuable property together. In California, each owner, called a joint tenant, must own an equal share.
Community Property with Right-of-Survivorship: California is a community property state, which means that spouses and registered domestic partners generally own all property acquired during the marriage jointly unless they take steps to keep it separate. If spouses or partners hold title to an asset as community property with the right of survivorship, then it automatically passes to the survivor when one spouse or partner dies.
Payable-on-Death Designations for Bank Accounts
In California, you can add a “payable-on-death” (POD) designation to bank accounts such as savings accounts or certificates of deposit. You still control all the money in the account — your POD beneficiary has no rights to the money, and you can spend it all if you want. At your death, the beneficiary can claim the money directly from the bank, without probate court proceedings.
Transfer-on-Death Registration for Securities
California lets you register stocks and bonds in transfer-on-death (TOD) form. People commonly hold brokerage accounts this way. If you register an account in TOD (also called beneficiary) form, the beneficiary you name will inherit the account automatically at your death. No probate court proceedings will be necessary; the beneficiary will deal directly with the brokerage company to transfer the account.
Transfer-on-Death Registration for Vehicles
California allows transfer-on-death registration of vehicles. If you register your vehicle this way, the beneficiary you name will automatically inherit the vehicle after your death. No probate court proceeding will be necessary.
Five Celebrity Estate Planning Mistakes
To riff off the lyrics of a song by the late Notorious B.I.G.: more money, more problems. While that’s certainly true in life, the problems compound after death as creditors, heirs and the Internal Revenue Service come calling for their share of an estate.
The twin burdens of fame and fortune don’t make estate planning any easier. If anything, having all the money in the world only complicates everything. Whether due to hubris, bad advice or just plain not planning on dying, celebs make the same mistakes as regular folks and then some. Read on to learn about the estate planning mistakes of five wealthy stars.
The infamous “Queen of Mean” may have died with a truly high-class problem: dying with too much money to comprehend. The widow of real estate magnate Harry Helmsley was a multibillionaire, and at the time of her death intended that her estate provide for the care of dogs “and such other charitable activities as the trustees shall determine,” according to a 2009 article in The New York Times.
Leona Helmsley wisely planned for her dog, Trouble, to be taken care of after her passing. Her judgment came into question with the actual details of the plan.
“She gave $12 million in trust for a dog, and at the same time, she cut out two of her grandchildren,” says Herb Nass, a New York-based attorney and author of the book “The 101 Biggest Estate Planning Mistakes.”
“She was an enormously wealthy person, and for her to leave so much to a dog and nothing to two grandchildren just makes me think she did not quite understand the extent of her wealth in some ways,” he says.
A judge subsequently reduced Trouble’s trust fund to $2 million (the dog has since died), and the disinherited grandchildren received a $6 million settlement.
Sammy Davis, Jr.
Singing and dancing legend Sammy Davis Jr. died in 1990. He was a member, along with Frank Sinatra and Dean Martin, of the iconic Rat Pack. Despite a long career in show business, acknowledged posthumously with a Grammy Lifetime Achievement Award, Davis’ estate had dwindled from his heyday to the time of his death. When he died, he left behind a large tax bill that the estate was unable to pay.
“He had a will that was very generous to a lot of people, and at the end of the day when he died, his estate was insolvent. Basically, the debt exceeded the assets,” says Nass.
Young people at the top of their game have every reason to believe they have plenty of time to plan for death, but for too many, that’s not the case.
“Here in Nashville (Tenn.), the quarterback of our pro football team, Steve McNair, was shot by a girlfriend, and turns out he had no documents,” says Howard Safer, chief executive officer of Argent Trust Company of Tennessee.
McNair left behind a wife and children, in addition to his mother whom he was supporting. One consequence of his untimely death was the displacement of his mother from the 45-acre six-bedroom home McNair had purchased for her, according to a blog post by North Carolina attorney Sabrina Winters. His estate was also hit with a massive tax bill as a result of not planning, according to a 2012 report by Estate Planning Source, which prepares trust documents to its network of attorneys.
In March 2012, McNair’s widow petitioned the probate court in Tennessee to get $3.7 million released from the estate in order to pay federal and state estate taxes, Estate Planning Source reported.
Some celebrities have erred by not going far enough with their estate planning. For instance, famous actress and model Marilyn Monroe left most of her estate to her acting coach, Lee Strasberg.
“She left him three-fourths of her estate, and when he died; his interest in Marilyn’s estate went to his third wife, who did not even know Marilyn. Marilyn’s mistake was not putting her assets in trusts,” says Nass.
Strasberg’s third wife, Anna, eventually hired a company to license Monroe’s products, which involved hundreds of companies including Mercedes-Benz and Coca-Cola. In 1999, many of Monroe’s belongings were auctioned off; including the gown she wore to President John F. Kennedy’s birthday party, for more than $1 million. Strasberg ended up selling the remainder of the Monroe estate to another branding company for an estimated $20 million to $30 million, according to a remembrance of the star by NPR in 2012.
It’s unlikely Monroe would have wanted someone she didn’t know to profit so handsomely from her belongings. A trust would have provided for Strasberg while he was alive and then after his death could have directed the remainder of her estate to someone of her choosing.
Similar to Monroe’s misstep, Jim Morrison, the iconic singer from the ’60s band The Doors, left his estate to his girlfriend, or common-law wife, Pamela Courson, who then died shortly thereafter with no will.
“So Jim Morrison’s estate went to the father-in-law that probably hated him,” says Nass. “(Courson) died from an overdose, and then her estate, including the interest in Jim Morrison’s estate, went to her parents,” says Nass.
Morrison’s parents contested the distribution of their son’s estate following the death of Pamela Courson. According to an article in People magazine from 1980, the Coursons and Morrisons split royalties and earnings from Jim Morrison’s estate.