Case Study: Why You Need an Estate Plan in California

Last week, I posted about why you need an estate plan in California. I gave a plethora of reasons why: avoiding probate (the cost, publicity, and time), helping your family know your wishes, planning for tax considerations. I talked about what it means to have a comprehensive estate plan in California. All of these things are true, but it all pales in comparison when it happens to your family. I thought it might be helpful to read what actually happens in real life, when a family in California has to manage their grief and their loved ones wishes — without an estate plan. (Disclaimer: This is not legal advice; every circumstance is difference. And due to client confidentiality, some particular details have been smoothed over and names changed.)

A few years ago, I got a call from a woman named Jane. Jane’s mom had just died in California. She didn’t think that her mom, Melissa, had a will or a trust - or any kind of estate plan. Jane and I talked through some of the basics about what this means: namely, probate court. I encouraged her to take her time and grieve, and perhaps while they were clearing out her mom’s house, they might find some documents that could help us figure out how to proceed.

They didn’t. Her mom didn’t have any documents anywhere in the house. Jane had remembered later that her mom said she hadn’t yet done a will and trust, but that creating a comprehensive estate plan was something that she needed to do. She just never got around to it. Based on this, we decided it was time to open a probate. Jane was the sole heir and beneficiary of Melissa’s estate: meaning, Melissa didn’t have a spouse or other kids. Jane didn’t expect anyone to contest anything, but this is what I told her to expect:

Cost: The full cost of probate would involve: 1) filing fees with the court; 2) publication fees; 3) sometimes a probate referee (assigned by the court to value the non-monetary assets like a house; 4) ongoing costs with her mom’s property (electricity, gas, and then property taxes that would go up as of the date of her mom’s death); 5) attorney fees - which are set by the state of California and are a percentage of gross assets. All of these costs are paid by the estate (by her mom) but she would need to “front” some of the money until the house was liquidated.

Time: We filed for the probate in June 2022; it closed in February 2024. Why? The court takes awhile to have hearings, it takes time to clear out a house and sell it, and it took awhile to find all of Melissa’s assets and debts. There’s also certain required waiting periods when a probate is involved (e.g. creditors have a certain amount of time to file claims).

Public: Melissa and Jane aren’t famous, but all the probate records are public. Jane started getting calls from realtors almost immediately after the probate was filed (as did I, but that’s my job!)

(Here’s a post about the full probate process, with the steps involved, if you’re interested.)

In the end, Jane’s had spent about $26,000 out of pocket that she needed to be reimbursed and the attorney fees were about $23,000 because the total value of the estate was $1,000,000. (Jane was also entitled to $23,000 in compensation, which she declined.)

Jane asked: how can I make sure my family doesn’t have to go through this? Jane is married with two kids of her own. And, of course: a comprehensive estate plan that includes a trust (which avoids probate), a will (to name guardians for kids), a financial power of attorney (for incapacity) and a healthcare power of attorney (for incapacity). If her mom had all of these documents, it would have saved Jane time, money, and the extra real estate calls.

When should someone create a comprehensive estate plan in California? Today.

Contact me today for a complimentary consultation about comprehensive estate planning in California.