Losing someone close to you is an emotional and difficult time. Additionally, someone from the family is usually left with the burdensome task of figuring out how to transfer or inherit property from the person who has died. The legal system uses the word “decedent” for the person who died and the phrase “decedent’s estate” is used to describe all the personal property, real estate and other assets owned when they passed away. To see other words and phrases that are important to this process click here.
Transferring or inheriting property after someone dies usually requires some type of court proceeding. The court process can be very complicated. However, there are situations in which family or relatives may be able to transfer certain property without going to court (how to avoid probate in California).
What Is Probate?
Probate is the legal process through which a deceased person’s estate is properly distributed to heirs and beneficiaries and any debt owed to creditors is paid off. In general, probate property is distributed according to the decedent’s last will and testament, if there is one, or according to state law if no will exists.
Probate is a formal court case that is overseen by a judge. The probate case will accomplish the following tasks:
- Appointing someone to oversee the estate during probate;
- Deciding if a will exists and whether the will is valid;
- Determining who are the heirs or beneficiaries of the estate;
- Defining the type and value of the decedent’s property;
- Fulfilling the decedent’s financial responsibilities; and
- Transferring the decedent’s property to the heirs or beneficiaries.
How Long Does the Probate Process Take?
According to the American Bar Association, the probate process, on average, is completed six to nine months after a probate case is opened with the court. This can vary depending on the court and may take years if there are disputes over legality of the will or distribution of assets. In addition, there may be costs associated with the probate process (such as court fees), the responsibility for which may land on the executor of the decedent’s will if they cannot be paid by the estate. These are additionally reasons to learn how to avoid probate in California.
What are the Basic Steps in a Probate Case?
Presenting the Will to the Court and the Executor
Whoever is in possession of the will at the time of a person’s death (the “custodian of the will”) must do the following within 30 days of the person’s death:
- Take the original will to the probate court clerk’s office.
- Send a copy of the will to the executor or, if the executor can’t be found, to a person named as a beneficiary.
If the custodian of the will does not do these things, he or she can be sued for damages.
Commence a Formal Probate Case in the California Superior Court
A formal probate case is commenced by the filing of a Petition for Probate (form DE-111). The person named in the case will be called the “petitioner.” The case must be filed in the county where the decedent lived (or if the person lived outside of California, in the California county where that person owned property). Additional documents and information must be filed in this case along with formal notices sent and hearings conducted, so the assistance of a probate attorney is strongly advised.
Appointing a Personal Representative for the Estate
The probate court will appoint a personal representative to oversee the estate. If there is a will, this person is usually named in the will and is called an executor. If there is no will or no executor is named in the will, the probate court will choose someone to take on that roll, and they will be called an administrator.
If someone dies without a will, the law provides a hierarchy of who should be named as administrator. The full list is found in Probate Code §8461. Understandably, the surviving spouse or legal domestic partner is at the top of the list, with children and grandchildren following from there.
Gathering Documents and Fulfilling Obligations
The estate representative must complete the following tasks:*
- Take possession and safeguard all property until everything is distributed and any debts are paid. For example, if there is a home full of furniture and other assets, the personal representative must make sure the house is locked and secure and that any important papers and valuables are locked up in a safe place.
- Figure out who all the heirs and beneficiaries may be.
- Uncover any and all assets and death benefits, such as life insurance, annuities, bank accounts, Social Security death and survivor benefits, veteran’s benefits, etc.
- Inspect any safe-deposit boxes for important papers or other valuables.
- Order certified copies of the death certificate.
- Collect the decedent’s mail.
- Cancel credit cards, memberships and subscriptions.
- Manage “digital assets” (such as online accounts, photos and documents stored on line, etc.).
- Notify the Franchise Tax Board.
- Notify the Social Security Administration if the decedent was receiving monthly social security benefits.
- Prepare the decedent’s final income tax returns.
*This is just a partial list of the steps you will have to take. To make sure you are doing all that is required of you, please coordinate with your probate attorney.
Additionally, some of these tasks my be difficult or impossible if the personal representative does not live locally or if they have other obligations. In these situations, the personal representative should strongly consider engaging a Free Legal Liaison to assist with the process.
Determining the Heirs and Beneficiaries of the Estate
Beneficiaries are those people named in a will who will inherit property. When there is no will (known as “dying intestate”), the people who have the right to inherit property are called “heirs.”
beneficiaries or heirs are determined either by:
terms of the will,
law, if there is no will or if there are problems with the will, or
- Other estate planning documents like beneficiary designations (like in retirement accounts), living trusts, or joint tenancy arrangements.
Determining the heirs and beneficiaries can be complicated and, unfortunately, sometimes contentious. The will or other documents might not be up to date or may even be contradictory. Old wills may not have accounting for new property, new spouses or even additional children from the date of the old will. Named beneficiaries or other heirs may have already died. Working with the Probate lawyer and a legal liaison is advised.
Finding and Accounting for the Estate Property
The personal representative will need to carefully identify all of the estate property. As a general guide, the following should be considered:
- Real property includes land and homes. It can also include long-term leases which are at least 10-year’s long or which have a purchase option.
- Personal property is all property that is not deemed real property. This can be both tangible or intangible property:
- Tangible property are physical items such as cars, boats, jewelry, furniture, antiques, etc.
- Intangible property usually refers to legal or contractual rights such as the right to collect money from someone, copyright claims, goodwill in a business, or even stocks and bonds which have documentation to evidence ownership.
Once all the property is identified and all the paperwork is in order, the personal representative will make a final inventory of everything and file it with the court (form DE-160).
All the debts that are deemed valid by the court will be paid from the estate. All valid debts must be paid before any other distributions are made. Such debts include all outstanding bills at the time of death as as well as funeral expenses. California requires creditors to submit their claims within four months of the appointment of the personal representative.
Estate Tax Must be Paid
The personal representative is responsible for making sure that all estate taxes are paid, including both federal and state taxes. If the personal representative fails to properly address these taxes, that personal representative may suffer personal liability for the failure.
Final Distribution of Assets and Concluding the Estate
The final steps involve providing an accounting of all actions taken by the personal representative with regard to the estate. The personal representative reports to the court on how the estate was handled. The report is scheduled for hearing so the judge can review how the personal representative handled the matter. The probate court will make the final determination on who gets the final assets of the estate. If there are no objections and the court approves the accounting and report, then an order is issued concluding the estate. Thereafter, the personal representative can distribute the remaining assets to heirs or beneficiaries and pay any necessary fees. After filing with the court any required final receipts to show that everyone received their property from the estate, the court discharges the personal representative from his or her duties and the case is concluded.
For more information on California Probate, Trusts and Estates, please see our resources here.