Hinshaw Estate Planning Blog

Tuesday, February 9, 2016

Three Big Reasons to Avoid California Probate Court by Establishing a Revocable Living Trust

Its Public!

Probate is a public proceeding— meaning anyone can examine your file, make a copy of your Will, and get a list of your family members and their addresses, their ages, and what they are receiving from your estate.

Its Time Consuming!

Probate also takes considerably longer to complete than a typical trust administration. Probate will usually delay distribution of estate assets and take anywhere from 9 to 24 months to complete.

Its Expensive!

The California Probate Code sets the maximum statutory fees that attorneys can charge for a probate. Higher fees can be ordered by a court for more complicated cases. The fees are four percent of the first $100,000 of the estate, three percent of the next $100,000, two percent of the next $800,000, one percent of the next $9,000,000, and one-half percent of the next $15,000,000.

The value of the estate is determined, in general, by the inventory for the estate. Debts are not included in determining attorney's fees, and if a house is appraised at $1,000,000, for example, and it has a mortgage of $800,000, it is still considered a $1,000,000 asset for the purpose of calculating attorney's fees.

For example, if a decedent had an estate worth $1,000,000, the probate fee would be $23,000! If both an attorney and an executor are permitted to receive a fee, the amount paid out of the estate would be doubled to $46,000! In probates that are complicated by lawsuits or tax problems, the attorney and executor can even ask the judge to approve fees that are higher than those set by state law.

Hinshaw Estate Planning is a practice group of Hinshaw, Marsh, Still & Hinshaw and assists clients in matters related to Estate Planning, Asset Protection, Planning for Children, Inheritance Protection, and Estate & Trust Litigation in the areas of Saratoga, San Jose, Los Gatos, Monte Sereno, Campbell, Santa Clara, Sunnyvale, Cupertino, Los Altos, Los Altos Hills, Mountain View, and Palo Alto within Santa Clara County, the areas of Menlo Park, Woodside, Atherton, Portola Valley, San Carlos, and Redwood City within San Mateo County, and the Greater San Francisco Bay Area.

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