Probate has several drawbacks which lead many people to avoid this process. The main reasons to avoid probate are that it is expensive, time-consuming and become a public record. Probate can keep your family and loved ones from receiving your estate, or what is left of it, for six months to a year. Its only benefit is court-supervision, which for most people is not a real benefit at all.
Helpful Hint: Under California Probate Code §13.100, if your probate estate is valued under $150,000, your assets may avoid probate and be transferred by a declaration. Otherwise, in order to transfer title of any property, the estate must pass through probate.
The probate of a will for a non-taxable estate can take a year or more. In certain situations, probate delays can create problems for your beneficiaries, business partners and others who may be impacted by your death.
Probate can be costly because of the probate court and executor fees. Legal and accounting fees may not be significantly different, since some legal and accounting work will be required whether or not a probate administration is needed. The administration work still needs to be done regardless.
Probate fees are based on property, which is subject to probate and does not include life insurance, retirement accounts, or joint tenancy property. You might be able to negotiate fees with the bank based on the actual work to be performed. Every estate incurs expenses in the administration of the estate, such as fees to attorneys and accountants who assist the executor or personal representative.
Helpful Hint for Understanding Probate: If using a bank or professional executor, always discuss and obtain an agreement on the fee before finalizing your will.
- Do you have a small business or professional practice that will need to be sold quickly upon your death? If yes, consider creating a trust or other provisions to ensure the probate process does not interfere with needed activities.
- Do you own stock options that may lapse if not quickly exercised upon your death?
- Can your estate accommodate the expenses that will be incurred as part of the probate process?