What is probate, and why should I plan to avoid it?
Probate is the legal process of distributing a deceased person’s assets and settling their debts while under the supervision of court. It often involves analyzing a person’s estate, collecting and settling all of their debts, and selling and distributing property.
The probate process can take a very long time.
The process often takes no less than six months, and the process can extend to years for larger more complex estates.
Even with proper planning, a deceased person’s assets must be accounted for and debts must be settled, which will still take time. However, utilizing proper planning can streamline the process and allow you to shorten the length of time necessary to complete.
Probate costs for estates can also be significant.
While costs overseeing an estate are unavoidable, probate incurs both attorneys’ fees and probate administration fees. With planning, one can significantly lower attorneys’ fees related to the processing of the estate and can potentially avoid probate administration fees entirely.
What are the costs associated with probate?
The two main sources of costs related to the probate process are attorney’s fees and probate administration fees.
Almost all estates will require some degree of assistance from a licensed probate attorney. Even estates avoiding probate through trust administration may have need to utilize an attorney from time to time, thus incurring some degree of attorneys’ fees. Most probate attorneys work on an hourly rate established through a fee agreement. For small estates with minimal complexity, fees may be a few thousand dollars, but for more complex estates the fees can potentially reach six-figures or more.
Those estates subject to probate also incur probate administration fees. These fees are determined under California Probate Code §10800, which establishes a “statutory fee” based on the gross value of an estate, following this table:
- Four percent of the first $100,000 of an estate
- Three percent of the next $100,000 of an estate
- Two percent of the next $100,000 of an estate
- One percent on the next $9,000,000 of an estate
- One-half a percent on the next $15,000,000 of an estate;
- And, above $25,000,000, a reasonable amount of the estate to be determined by the court.
For estates up to $100,000, a person administering probate would be entitled to four percent of that estate. So, an estate of $100,000 would leave the person administering the probate process entitled to $4,000 of that estate.
Using these figures, an estate valued at $400,000 would often have combined representative and attorneys’ fees of around $20,000.
What is an estate plan?
The modern estate plan consists of five documents which work in concert to protect against a number of issues which may arise during life and with the administration of an estate.
Those issues may include such problems as protecting an individual during moments of incapacity, managing taxes at death, and ensuring proper distributing of assets at death.
Documents commonly include:
A revocable trust, which is a legal vessel intended to hold your property and transfer it at death to your chosen beneficiaries.
A trust certification, which is a document intended to act as the face of your trust, to grant you privacy over the provisions concerning asset management.
A pour-over-will, which is a document intended to guide any property not accounted for into your trust at your death, thus avoiding probate.
A power of attorney, which is a document used to establish an agent who will oversee your assets during times of incapacity;
And, an advanced healthcare directive, which is a document used to establish an agent who will make critical health decisions when called upon to do so.
The preceding is a typical estate plan. Each client may have different wants and needs, and, thus, each estate plan may be different.
What is involved in estate planning?
The estate planning process may be different for each person and each law-firm. At this firm, however, one can expect the following:
Consultation
After reaching out to my office, you will be scheduled for a consultation. A consultation consists of a one-hour meeting either in person, through video call, or over a phone call. During that meeting, general questions regarding an estate may be answered, and the overall estate planning process will be described.
Analysis of Estate
During this step, a full analysis of your assets and debts will be undertaken to help assess potential tax liabilities faced by the estate. During this process, you will be presented with a questionnaire which will assist you through the process.
Drafting of Estate Plan Documents
During this step, your documents will be prepared and tailored to your needs.
Review of Documents
During this step, your document will be explained to you so that it can be further tailored to your needs.
Finalization of Documents
After discussion of your documents, any requested edits will be integrated and presented for your review. Once edits are completed, your documents will be finalized and ready for signature.
Signing of Documents
A meeting will be scheduled between your attorney, a notary, and two valid witnesses. During this meeting, your documents will be reviewed and signed by you before the notary and witnesses. Upon completion of this meeting, your documents will be complete, and your estate plan will be in place.
Trust Funding
If necessary, my firm will assist you in the process of trust funding. This may include retitling assets into the name of your trust, or drafting letters to inform people to direct assets to your trust.
Meetings can be held via video call, in your home, or, if requested, at a private office near your home, anywhere in Southern California.
What is the difference between a will and a trust?
A will can be understood as a document which establishes your intent concerning who should inherit your property at your death. It is a document which guides the probate process, and one that the court will primarily look at to determine who receives your property when you pass away. A will has a testator, the individual who wrote the will and dispenses their own property, and a beneficiary, the person who receives property.
A trust is a legal instrument which holds property. Used as an estate planning tool, a trust will include provisions concerning who should receive the property upon your death. Through the use of this legal instrument, one can avoid the need for judicial supervision. A trust generally has three roles associated with it. The Settlor, the individual who created the trust. The Trustee, the person responsible for managing property within a trust. The Beneficiary, the people who receive property and/or profits from a trust.
A simple trust could be giving a few dollars to someone and asking them to get you a soda, while complex trusts can hold multi-national corporations and millions of dollars. In both of those cases, an individual is putting a set amount of assets under the control of a trustee for the benefit of a beneficiary.
What is trust funding?
Trust funding is the process of moving assets into your trust.
Trust funding can be accomplished through a number of methods. First, during the creation of your trust, property will often be named as part of the trust through a schedule of assets. Second, property can be transferred into a trust by re-titling assets in the name of the trust, thus giving clear indication that the property is managed by the trust.
Property can be further funded into at trust at your death by listing the trust as a beneficiary of that asset. For example, life insurance payments can become part of the trust by listing the trust as the beneficiary of those payments.
What are estate taxes?
An estate tax is a tax on ones right to transfer property at death. There is a federal estate tax, and sometimes a state level estate tax.
In California, however, those who pass away after January 1, 2005, no longer have to pay an estate tax.
On the federal level, there still exists an estate tax. The amount owed is determined by the gross estate at time of death.
What are generation skipping taxes?
The federal government collects a Generational Skipping Tax (GST) intended to simulate the tax results that would occur if family wealth were subject to an estate or gift tax at each generation.
The GST tax primarily occurs in instances where an individual leaves assets to a grandchild. It is used by the federal government to prevent the avoidance of paying estate taxes by granting property to those further down the generational line.
What is an agent?
An agent comes up in estate planning under two context, an agent appointed under a power of attorney, and an agent appointed under an advance health care directive.
An agent under a power of attorney is the individual granted legal permission to act on the behalf of another concerning matters of finances.
An agent under an advance health care directive is the individual granted legal permission to represent another concerning matters of health decisions.
In both cases, the individual appointed as an agent is given permission by another to act in their stead and make critical decisions. The power of attorney, in particular, grants expansive power over the individual’s financial interests, thus the decision of who should act as agent should be considered carefully.
For further questions, schedule a consultation at Francisco@CalderonTrusts.com.
Updated October 6, 2026