3 Reasons to Avoid Probate in California
A brief note: probate = the name of the court. You might be familiar with criminal court or family court; this is just probate court. When someone dies, probate court has to figure out the assets and debts and then get all assets into the name of someone who is alive.
Probate is a public proceeding. That means everyone gets to know everything. Whether you’re talking about getting the power to make financial or healthcare decisions during someone’s incapacity or you’re talking about when someone dies.
It takes a long time. Many times 18-24 months, depending on the county in California.
The cost is a percentage of gross assets - set by California state law. GROSS ASSETS. This means that it doesn’t matter if you have a mortgage on your house; it’s going to be based on the total value of the house. What are those fees?
4% of the first $100,000
3% of the next $100,000
2% of the next $800,000
1% of the next $9,000,000
.5% of the next $15,000,000
But these fees are for the executor and the attorney that they hire. In other words, for an estate with gross assets of $500,000, the fees are $13,000 for the executor and $13,000 for the attorney, for a total of $26,000.
For an estate with $1,000,000 in gross assets, the fee is $23,000 for the executor and $23,000 for the attorney, for a total of $46,000.
For an estate with $5,000,000 in gross assets, the fee is $61,000 for the executor and $61,000 for the attorney, for a total of $122,000.
How do you get out of probate? One way is to create a trust. Contact me and we can talk through your options.