Top 10 Mistakes People Make in Estate Planning, Wills and Trusts: # 4 – Failure to Avoid Probate

California probate is well worth avoiding! Unlike many states, where probate of a will is a fairly quick and easy process, California probate is expensive, time consuming and very public.

California probate is very expensive. The probate court filing fees and court appraiser fees are usually about $2,000 minimum. Attorneys fees and executor fees are set by law according to a formula and the value of the estate. The value used for calculating fees is the gross value, not the net value after deducting liens or expenses. On an estate valued at $1 million, attorney and executor fees are $48,000, split evenly between the attorney and the executor. Fees and expenses can be even higher if contested litigation is involved, such as creditor disputes or lawsuits to recover property.

Throw Money AwayThose expenses can be avoided if you have a trust. Most trusts cost only a few thousand dollars to create. Contrast that with $50,000 for the probate process! And that’s just for a $1 million estate. The expenses are higher as the estate value increases. Even average people can easily exceed a million dollars with the value of their home, cars, a few bank accounts, and life insurance payable to their estate.

California probate is time consuming and very public. If you die without a trust, unless your estate is very small, it will have to pass through the probate court. Court 1 In California, it takes a minimum of about 6 months to finish a probate, and usually closer to a year (sometimes several years!) Your heirs have to wait for their inheritance. Meanwhile, the executor (usually a loved one) will have to account for every penny, follow required procedures before taking any action, and keep reporting to the court.

California probate is also a very public process. The papers that must be filed with the court — and which become public documents available for all to see — include your last known address, the names and addresses of all of your loved ones, an itemization of your property and the value of each item, and disclosure of “who gets what” from you. If you think no one bothers to look at public court filings, think again! There are all manner of predators out there, trawling the court filings in search of heirs to scam, property to “case out” for potential theft, or folks to pursue with unwanted solicitations.

With proper planning, especially the use of a trust, all of these situations can be avoided.

About Helene P. Dreyer Koch

Estate Planning Attorney (Wills, Trusts, Probate) Indian Wells, California * 760.360.2400
This entry was posted in Estate (Will) Administration, Trusts and tagged , , , . Bookmark the permalink.

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