When Is Probate Required?
Probate is necessary when someone dies and the fair market value of all their belongings is greater than $150,000. As probate attorneys can tell you, under Orange County probate law, “belongings” includes everything that the person did not put in a trust. Or, it includes everything that is subject to transfer outside probate through a beneficiary designation (like life insurance). This includes:
- houses (except when owned in joint tenancy with rights of survivorship)
- undeveloped land, mineral rights
- retirement funds, furniture
- bank accounts
- sporting equipment
- anything else the decedent may claim to own
Debt does not offset the calculation. Moreover, debt is not a factor in determining if probate is necessary.
According to our probate attorneys, probate must be opened even if the decedent died before writing a will. If the decedent left a will, the named executor should contact us to open probate right away. However, if the executor lacks the ability or desire to act, then any interested person may contact us to open probate. If there is no will, then any interested person may contact us to open probate. According to California probate law, wills should be lodged (filed) with the probate court within 30 days of the decedent’s death.
What Is an Executor/Administrator?
People that come forward to open probate are referred to as the executor or administrator. They have duties and responsibilities, but also have the right to receive compensation in an amount equal to what their probate attorneys receive for ordinary services. The formula for calculating compensation is provided below. It applies to all probate attorneys, and executors or administrators.
Probate is a court supervised process of transferring property from the decedent’s estate to beneficiaries. It starts when an interested person (usually a family member) retains an attorney to open probate in the county of decedent’s last permanent residence. If the decedent died with a will, the person nominated as executor (in the will) may contact us to file a petition for appointment as the executor. If there is no will, any interested person may contact us to open probate. We do that by filing a petition seeking their appointment as administrator.
Executors and administrators have the same duties and responsibilities. They assist their attorney in identifying and collecting, as well as appraising, the decedent’s assets. They also pay estate debts (from estate funds only), and distribute the remaining assets according to terms of the will. If there is no will, they subsequently distribute assets to the decedent’s heirs pursuant to intestate succession laws.
How Is Compensation Determined?
You and your attorney are entitled to equal compensation. However, we do most of the work and only request your assistance with simple assignments (such as gathering the decedent’s mail). You will never feel overwhelmed or left wondering how to complete a task. And please note, we specifically designed the probate administration system we created to save you time and money.
California Probate Code Section 10810 details the formula for determining attorney and executor or administrator’s compensation. Please note however, probate courts can award additional compensation for extraordinary services (typically in more complicated cases).
The calculation for ordinary compensation is as follows:
- 4% of the first $100,000 of the gross estate value,
- 3% of the next $100,000 of the gross estate value,
- 2% of the next $800,000 of the gross estate value,
- 1% of the next $9,000,000 of the gross estate value,
- 1/2% percent of the next $15,000,000 of the gross estate value.
The probate court will determine reasonable compensation for an estate valued at more than $25,000,000.
The statutory compensation for probating an estate with a gross value of $500,000 is $13,000 for the attorney and $13,000 for either the executor or administrator. It is calculated as follows: 4% of the estate’s first 100,000, which is $4,000 (leaving $400,000), plus, 3% of the estate’s next $100,000, which is $3,000 (leaving $300,000), plus 2% of the estate’s remaining value of $300,000, which is $6,000. The sum total is $13,000.
Here’s one of many tips we offer our clients:
Please keep in mind that probate compensation is treated as ordinary income for tax purposes. You should consult with your attorney for strategies to avoid or minimize your personal income tax consequences before accepting payment.
In closing keep in mind that the gross estate value is determined by an inventory and appraisal of estate assets that the probate referee must approve before the close of probate. Also, the estate’s value does not include debts when calculating compensation. In Orange County, the probate attorneys, as well as executor or administrator, receive payment at the close of probate from estate assets upon court approval. For more information, send a written inquiry by filling out the form at the bottom of this page or by calling our probate attorneys to set your no-cost in person consultation.
To Learn More About Probate Law, Contact Orange County Probate Attorneys Today
Call today for your free consultation: (714) 963-7543