"What is Probate... in California?"
by Valerie K. deMartino

Probate is the process by which a court determines who is entitled to a decedent's assets. Property of the decedent which must be "probated" does not include property held in joint tenancy, property held in a trust, or property for which a beneficiary was named, such as IRA accounts and life insurance.

Probate is started by filing a petition for probate of a will or, where there is no will, appointment of an administrator for the estate in the Superior Court. The order for priority of appointment is set forth in Probate Code, Section 8461 and generally follows the order of priority of inheritance. Probate petitions should be filed in the county where the decedent was living at the time of death, regardless of where the person actually died. Hearings are generally scheduled 4-6 weeks from the date of filing of a petition for probate. During the interim, notice of the probate hearing must be sent to all the decedent's heirs and all persons mentioned in the will. If there is an emergency which requires action by a personal representative before the regularly set hearing date, a petition for appointment of a special administrator may be filed.

Generally the person who is appointed by the court, either an administrator or executor, is required to post a bond for the faithful performance of his/her fiduciary duties in order to protect creditors and heirs. The executor or administrator who desires to manage the estate with a minimum of court supervision must post a bond equal to all assets in his/her possession plus the annual income expected to come into the estate. An executor or administrator who does not anticipate having to sell real property or who is willing to get court confirmation for any sale of real property may be required to post a bond sufficient to cover only the liquid assets and annual income he/she will manage. Finally, an executor or administrator who is willing to place all or most of the estate cash and/or securities in a blocked account will be required to post a minimum bond.

During probate, the distribution of the estate and payment of any creditors is supervised by the court. Administration of the estate is directed toward three goals: (1) collection and management of assets, (2) payment of debts and taxes, and (3) distribution of the balance of the assets as provided in the will or by law.

Once an executor or administrator is appointed, he/she must collect and inventory all assets of the decedent which are to be probated. A Probate Referee appointed by the State Controller appraises the property inventoried as part of the estate. The personal representative has the duty to care for all estate property during the probate.

Creditors claims must be submitted to the personal representative within four months after appointment. Any claims not presented are forever barred. This includes claims the executor or administrator himself may have, for example claims for reimbursement of last illness or funeral expenses. Claims should be made on special forms and must be approved by the executor or administrator and the court before payment can be made.

Filing returns for death and income taxes relating to the decedent are the responsibility of the executor or administrator. California has no inheritance tax for any resident who died after June 8, 1982, except for the "pick-up" tax associated with the statutory allowable credit for state death taxes under Internal Revenue Code §2011. Depending on the gross value of the estate, it may be necessary for the executor or administrator to file a federal estate tax return (Form 706). The gross value of the estate includes assets which may not be probated, such as joint tenancy assets and trust assets, thus the "estate" for federal estate tax purposes is different than the estate for probate purposes. The federal estate tax return and the tax are due nine months after death. It may be necessary for the executor or administrator to prepare and file federal and state income tax returns for the decedent for the period ending with the date of death. These returns are not due until the following April 15. The executor or administrator may also be required to file income tax returns for the estate for each year until the final distribution if it has sufficient income to require a return. The estate is a separate entity for federal and California income tax purposes. It may elect the calendar year or any fiscal year ending at the end of any calendar month within 12 months after death.

Final distribution of an estate can usually be made soon after the all debts and taxes have been paid and the Inventory has been filed, unless property must be sold to pay creditors or facilitate distribution.

Fees for the attorney handling the probate as well as the personal representative are set by statute and are based on a percentage of the appraised value of the probate estate with certain adjustments. For example, the minimum statutory fee for a $100,000 estate is $4,000, for a $300,000 estate it is $8,000, and for a $1,000,000 it is $15,000. The court may also award whatever fees it considers just and reasonable for extraordinary services by the personal representative and/or attorney, such as sales or mortgages of real or personal property; will contests; litigated claims against the estate; preparation of the estate, income, or other tax returns, or adjustment, litigation, or payment of any of those taxes; litigation relating to property of the estate; carrying on the decedent's business under court order; and other litigation or special services as necessary.

From start to finish, probate of an estate in Los Angeles County takes approximately one year. Litigation, sales of property, delays in filing tax returns or other delays can cause probate to take much longer.