When it’s time for a final disposition.
In an ideal world, the mere existence of a Will or trust would indicate a meticulously spelled out estate plan with clear instructions for the trustee/executor, complete lists of assets and liabilities, and no need for a lengthy probate or trust administration process.
In the real world, many estates are left for the survivors and trustees to figure out next steps. It is a painstaking process to inventory and appraise all assets, identify all creditors and liabilities, and in many cases resolve disputes among the parties.
If you find yourself appointed executor or trustee of an estate, the attorneys at Blacksburg Law provide expert counsel, diligent follow-through, and peace of mind that the affairs of the estate will be resolved in a timely and efficient manner.
Probate is a court-managed (and often mandated) process through which personal and real property is passed on to heirs in the absence of a funded living trust. While most of our clients set up their estates through a living trust to avoid probate, many estates do go through probate. Blacksburg Law guides you and your family through the confusing and heavily bureaucratic probate process.
What to expect in probate.
Though probates vary, some involve locating the Will and making a filing with the probate court. Once the Will has been accepted, the court appoints a personal representative (executor). After that, all of the heirs need to be formally noticed in writing. They have the opportunity to review the Will and make any appropriate challenges or contests.
Likewise, all creditors must be identified, located and provided notice of the pending resolution of the estate. Creditors are given four months to file claims against the estate.
After debts and taxes are paid, assets are distributed in accordance with the Will or intestacy statutory law. Some assets, like life insurance and retirement accounts, might not be affected by probate and pass directly to a named beneficiary. Other kinds of assets, like those held in joint tenancy, will pass directly to the other joint tenants. All of these assets are counted as part of the estate for purposes of calculating whether taxes are due or regarded as part of any existing or future Medicaid applications. Only estates over a certain “probatable” threshold have to be probated. Currently that amount is $184,500.
We guide you through every step of probate, from lodging the Will and notifying heirs, to transferring assets to the intended beneficiaries.
Probate is a public, expensive, usually lengthy process which is best avoided by having a living trust in place. If you’d like to discuss your estate and avoid probate, please contact us for a free discussion.
Probate in California: Try this at your own risk.
While efforts have been made to simplify the probate process over the years, the opposite has come to be. Lay people must contend with electronic filings through specialized portals, constantly shifting local rules of court for every county, long delays due to understaffed courts. As you can see by this checklist, it is a time- and labor-intensive process. Mistakes and disputes can further complicate it.
What follows at the end of this page is a loose overview of the California probate phases. This is not a detailed road map and should not be seen as all-inclusive directions within every phase. But here’s the process, which usually takes between 9-18 months on average:
Even when there is a will or a trust in place, there is still a legal process of administering the estate per the expressed wishes of the Grantor. Administering the estate simply means winding up loose ends, corralling assets, dealing with creditors, government agencies (last year’s income tax return, ahem), and distributing assets to beneficiaries. Or as I think of it: sweeping up before turning out the lights.
Why Trustees Need a Trust Attorney
Each of the numbered Trust Administration steps below requires diligence and a careful understanding of the trustee’s duties. The trustee cannot afford to make mistakes. Failure to pay taxes may result in late fees and penalties, which deplete trust resources. Not providing proper accounting may raise a beneficiary’s suspicion. Failure to notice creditors and/or pay debts could mean that you are on the hook for them.
Any mistake may cause a beneficiary to accuse you of mismanaging the trust. This, in turn, could result in a lawsuit against you. If a beneficiary has reason to suspect you have improperly administered the trust, it will be up to you to defend your actions. There are too many possible landmines to take your role as a trustee lightly.
At Blacksburg Law, we work with trustees who are responsible for managing a trust when a Grantor dies. We support you through what seems like an overwhelming process and a difficult time.
While no two trust administrations are the same, here are the key obligations common to all:
- Gather essential documents. Before you get started, get copies of the death certificate and the trust document. The trust, along with asset information, contact information and other important documents, will likely be found among the deceased person’s personal papers.
- Provide notice to beneficiaries. California law requires that notice of the trust administration be given to heirs and beneficiaries of the trust.
- Identify assets. One of the trustee’s responsibilities is to corral the trust assets and protect them until distribution. If the trustee fails to do this, he or she can be held liable.
- Identify debts. If the decedent had any debts or liabilities (including income taxes), they should be identified. Valid claims made against the estate by creditors and others must be paid. Failure to do so may result in personal liability for the trustee.
- Responsibly invest trust assets. All trust assets must be managed in a prudent and reasonable manner. Any real property, such as a vacant home, should be rented or sold. Liquid funds need to be invested in relatively low-risk ways that provide reasonable returns.
- Obtain titles. The trustee needs to obtain titles to trust assets (that is, assets titled in the name of the trust).
- Timely file appropriate tax documents. This is one step that can be fraught with mistakes. The trustee is required to file any necessary tax documents, and to do so on time. Failure to do so could result in unnecessary tax liabilities for the trust.
- Maintain proper trust accounting. Beneficiaries are entitled to have a complete accounting of all transactions. California’s Probate Code sets forth certain requirements for this accounting.
- Distribute trust assets. The trustee is responsible for efficiently distributing trusts to beneficiaries in accordance with the trust’s terms and conditions, and with state law. There will likely be certain attendant obligations such as transferring titles. Some assets may stay in the trust for years, with benefits to be paid out over that time. The trustee’s responsibility, in that case, will be ongoing.
- Delegate duties as necessary. You are not required to be an expert with respect to all duties imposed by the trust. You may need to turn to those with experience in accounting, investing, real estate, and other fields. Barring no contrary provisions in the trust, this is acceptable. But remember, you are ultimately responsible for overseeing anyone to whom you delegate these roles.
- Dissolve the trust. Once all assets are distributed to beneficiaries in accordance with the trust, it should be dissolved. This will terminate the trust as a legal entity.
At Blacksburg Law, our experienced trusts and estates attorneys help you fulfill your duties and ensure that all obligations of the trust and of state law are met.
Need help with probate or trust administration? Schedule an initial call here.
- Locate decedent’s will or trust, if there is one
- Prepare complete address list of all named executors, trustees, beneficiaries, and heirs
- Check local rules in the court where the probate is to be filed for special forms required in the probate proceedings
- Determine appropriate legal newspaper for the formal publication of probate action
- Prepare and file probate petition to begin process and get an executor appointed to act
- Arrange for publication of notice to creditors in local newspaper
- Send notice of hearing to all interested parties
- Review probate notes at least a week before the hearing on probate to ensure all information has been provided
- Prepare and file any necessary supplements to address comments in probate notes
- Attend hearing on probate
- Obtain and file probate bond (insurance), if necessary
- File and get 2-3 certified copies of letters authorizing executor (if there is a will) or administrator (if no will) to act on behalf of estate
- Obtain conformed copy of order of probate
- Provide notice of death and probate proceedings to all known creditors
- Request assignment of probate referee (if not automatically done by the court)
- Contact probate referee to complete inventory and appraisal
- File inventory and appraisal.
- Wait creditor period (unless otherwise ordered by the court, creditors have 4 months after issuance of letters within which to file claims against the estate.)
- Accept and/or reject claims and pay creditors; resolve rejected claim disputes before the court
- File any required tax returns
- Provide a final accounting to all beneficiaries
- File petition for final distribution and order (earliest is 4 months after date letters are issued)
- Review probate notes at least a week before hearing on petition for final distribution to ensure court has all information requested/required
- Prepare and file any necessary supplements to address comments in probate notes
- Attend hearing on petition for final distribution
- Distribute assets to beneficiaries and get signed receipts
- Record order of distribution in county where all real property of the estate is located
- File signed beneficiary receipts with court
- File discharge of executor or administrator
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