Wills and Probate
A will has several main functions: it gives you an opportunity to name who receives your property when you die (beneficiaries) and if you have minor children, the will allows you to name a guardian to take care of your children. The will also allows you to name an executor: someone you trust to take charge of your estate when you die.
What many people are not aware of when they come in to see me is that they already have a default estate plan, whether they like it or not. The California Probate Code spells out, among other things, what happens if someone dies without a will (“intestacy”). Most people, given the option, would make different choices than the automatic provisions of the Probate Code.
A will still needs to be probated. It simply avoids your property passing by the intestacy laws, a process in which the probate court divides up your assets according to a set formula and distributes your assets to your heirs. With a will you have no control over timing; your assets pass to your beneficiaries at your death.
Probate fees are set by statute:
* 4% on the first $100,000
* 3% on the next $100,000
* 2% on the next $800,000
* 1% on the next $9,000,000, and so on.
So a one million dollar home will cost about $23,000 to probate, based upon the gross fair market value (not net of any mortgages or debts).
In addition to the statutory fees, probate can be a time-consuming and public process. However, some estates may pass without administration: where assets are left to a surviving spouse, or where the estate has probate assets valued at $150,000 or less.