Estate Administration

A decedent’s estate is administered either formally or informally, depending on the size and nature of the estate. Formal estate administration is called probate and is a court-supervised process. Informal estate administration can be as simple as filing a proper form with the DMV to register a vehicle owned by a decedent, preparing a small estate affidavit to claim personal property or bank deposits, recording an affidavit of surviving joint tenant to clear title to joint tenancy property; or recording a community property declaration to pass title to community property to the surviving spouse. Of the deceased had a living trust, then estate administration entails administering the trust and directing the assets to the intended beneficiaries.

In most cases, the answer is no. In California, there are broad classes of property that are exempt from probate. The most common are the following:

• Assets held in joint tenancy with right of survivorship, such as a house. In this case, the surviving joint tenant succeeds to the interest and generally all that is necessary is to record an affidavit of surviving joint tenant and you have cleared the title.
• Accounts that are payable on death to a named person.
• A trust.
• Life insurance policy that names a beneficiary.
• An IRA account that names a beneficiary.
• When a married couple owns all assets as community property, then there is an expedited procedure that avoids probate to transfer to the surviving spouse his or her interest in the deceased spouse’s property.

Only the Superior Court can appoint the personal representative of a decedent’s estate. Appointment is requested by filing a Petition for Probate. If the nominated executor of a will declines appointment, then those persons named as successor executors have priority appointment. For contested matters, the court will act in its determination of the best interest of the estate in appointing a personal representative. If a person dies without a will, the law provides for priority of appointment.

Moving to remove a trustee or executor or administrator is nothing to be undertaken lightly. Often satisfactory results can be obtained without having to file a court action seeking removal through negotiations between the attorneys for the complaining party and the estate or trust attorney. The first step should always be consulting your attorney to asses whether removal is appropriate or practical, and to see if something should be filing a removal petition won’t produce results. If it does become necessary to seek the removal of a trustee or personal representative, then a petition would be filed and the court would hold a hearing on the matter to review evidence and hear argument, much like a trial. Such proceedings can be time consuming and expensive, and ordinarily a trustee or personal representative can use estate funds for his or her defense.

The following comprises the cost of probate in California: court filing fee (approximately $465); publication fees (anywhere from $150 – $1,300 depending on circumstances); fiduciary bond, if required (can be as little as $150 to many thousands, depending on size of estate and other factors); probate referee fees for approximating estate (1/2 of 1 percent of value of estate); statutory fees payable to personal representative and attorney for personal representation (declining percentage of value estate not counting debts).

Probate costs and fees are paid out of funds of the estate. The fees for the personal representative and the attorney for the personal representative are paid at the end of the estate administration, as allowed by the court.

If you have to probate an estate, there is a certain period required for published notice before the administrator or executor can be appointed. Then there is a creditor claim period that has to pass. It takes about one month for the published notice and four months for the creditor claim, so you are looking at a minimum of six months from the time you start a probate to the earliest you could conclude it. The goal of the California legislature is to have probates that don’t require a federal estate tax to be completed within one year and for estates that require an estate tax to be completed within 18 months. If the proceeding is contested or there are complications, it can take much longer.

In our experience, most estates don’t create a federal estate tax liability because the exemption amounts have increased sufficiently to shield most moderate-sized estates from estate taxes. Even if there otherwise could be a federal estate tax liability, it could be advantageous to use the marital deduction, to defer estate taxes until the death of the surviving spouse.

If the will in question is a printed or typewritten document, it must be signed by the person making the will (called the testator), dated and signed in the presence of two disinterested witnesses who are at least 18 years old. The document should clearly indicate that it is the testator’s will, and the testator has to be of sound mind. If it meets all of these tests, it is a valid will. If the will is handwritten (called a holographic will), then all of the will has to be in the testator’s handwriting; it can’t be partially typed. The handwritten will must be dated and signed at the end of the document, and the testator has to be of sound mind. If it meets all of these tests, it does not need to be witnessed to be a valid will. If the will meets these requirements, in most cases the court will consider it a valid will.

Wills and trusts are challenged, called contested, for a variety of reasons, including improper execution, incompetency of the testator or trustor, undue influence, or impermissible transfers. If you have valid reason to challenge a will or trust, you should contact an attorney as quickly as possible as there are strict time limits for starting a contest, and should you find yourself having to defend a will or trust from a contest, you should contact an attorney without dely.

The failure of an estate’s personal representative or a trust’s trustee to properly perform their duties may constitute a breach of fiduciary duty. There are a myriad of ways in which executors and trustees can find themselves cough up in a breach of fiduciary duty, the most common being failure to administer the estate for the benefit of all beneficiaries and not for the benefit of the fiduciary himself or herself. Our office is experienced in counseling fiduciaries as to how to avoid these pitfalls and in representing beneficiaries who are being harmed by a fiduciary’s beach of duty.

Yes. As a beneficiary you have the right to a full accounting of the estate unless you waive an attorney. It is the responsibility of the estate’s personal representative to develop the accounting and provide a copy to all estate beneficiaries.