When is probate required?

Categories: Probate

One of the most common questions we are asked is “when is probate necessary?” In California, any estate that has a gross value of $150,000 or more is required to go through the probate process unless the estate passes by operation of law. For example, if a person dies owning one home valued at $500,000 with a $400,000 mortgage, the estate is required to proceed through probate because the gross value is over at least $150,000.

What is probate? Probate is a court-supervised process whereby the assets and debts of the decedent are managed and paid/distributed by an administrator (if there is no will) or an executor (if there is a will) pursuant to court order. The executor or administrator are appointed by the court. Probate is an expensive process and can take anywhere from one year to three years or longer in some cases.
How much does probate cost? The executor or administrator of the probate estate is required to be paid according to California Probate Code §§10800 and 10810. Below is the schedule of fees provided for in the Probate Code:

  • 4% of first $100,000
  • 3% of next $100,000
  • 2% of next $800,000
  • 1%of next $9,000,000
  • 0.5%of next $15,000,000

If the administrator or executor hires an attorney to represent them in Probate court, the attorney is entitled to the same fees as the administrator. These statutory fees are based on the gross value of the estate. Therefore, on the scenario explained above with the home valued at $500,000, the administrator would be paid $13,000, and the attorney would be paid $13,000. Additionally, there are expenses involved in the probate process including the initial filing fee (which is currently $465.00 in Orange County), publication fee (approximately $400.00-$900.00), process server fees, additional filing fees, and probate referee fees. As you can see, a modest estate in California can cost anywhere between $30,000 and $35,000 in probate fees and costs.

Moreover, due to the packed court system in almost every county in California, the probate process is taking anywhere from 1 year to 3 years to complete. This means that the beneficiaries or heirs, in most cases, will not receive their inheritance for at least that long.

How can a person help their family and friends avoid probate? Any property that is in a revocable trust is not subject to the probate process. The cost associated with creating a trust is far less than the expense of probate. Do your loved ones a favor and urge them to research the benefits of having a trust. They will definitely thank you, as will their family and friends.