What To Expect In California Probate

So you have been named the executor (when there is a will) or will become the administrator (when there is no will) of an estate in California now what?

Let's start with a simple question… Do you even need Probate?  Probate is the process of transferring the assets of the deceased to the rightful heirs.  This is done by “proving” the will (if there is one) or verifying the heirs at law when there is no will (also called Intestate Succession).  In addition to the transfer of assets probate ensures all the affairs of the deceased are closed such as: filing tax returns, valid debts are dealt with, and funeral expenses are paid.

Given that probate is mostly about the transfer of assets, you really only need probate when there are assets that need a court order to be transferred.  Read more about what assets go through probate here.  There may be special circumstances where probate is needed and there are no assets to probate, this could be if there are future payments that will be made to the deceased and only the estate can be the recipient.  Examples can include future payments from a pension plan, a lawsuit that the deceased is the recipient of proceeds, or when the family will initiate a wrongful death suit.

California does have simplified small estate procedures for estates that qualify for the following special circumstances:

  • Estate assets are under $150,000 with no real estate
  • Estates assets are under $150,000 with real estate
  • Estates that have a surviving spouse or domestic partner
    • Note this is due to community property laws (special spousal/domestic property transfer laws), and there is no asset limit.

For all other estates full probate will be needed.  This simply means that the probate court will be involved and supervise the process.  You will need to communicate with the court at various steps, let's go through them.

1)Petition The Court- This is the first step in California probate process.  You will tell the court about the deceased, if there is a will or not, who will be responsible person for the estate, who are the next of kin and a rough estimate of the assets.

The court will set a hearing to allow anyone to challenge the facts of the petition.  Prior to the hearing you will need to notify the next of kin, anyone named in the will (if any) and make a public notice in a local newspaper announcing the hearing and petition.

If there is a will the only challenges that are allowed are:

  1. There is a more recent valid will, and that will should be probated
  2. The deceased was not in their full mental capacity when they signed the will
  3. The signature of the will is forged

When no will exists you will only be able to challenge who can be the administrator or any facts in the petition.  The priority of administration goes as follows:

  1. Surviving Spouse
  2. Surviving Children
  3. If no spouse and no children then:
    1. Surviving Parents
    2. Surviving Siblings
    3. Surviving Aunts/Uncles
    4. Surviving Nieces/Nephews
    5. Extended family

Once the hearing is over and any challenges have been addressed the the court will issue the Letters of Testamentary (when there is a will) or Letters of Administration (when there is no will).  These letters are the official legal authority to act on behalf of the estate. This authority will allow the estate to change title of assets, demand information from institutions, open safety deposit boxes etc..

2) Report The Inventory Of The Estate- In the initial petition you provide a rough estimate of the estate.  As you did not have any authority you are not expected to know the exact assets and debts of the estate.  That is why the court provides a window of 3 months after the letters of authority are issued to provide an official inventory.  Of course there are circumstances when assets are discovered after the initial inventory is filed, you will then need to amend the inventory to reflect any newly discovered assets.

Note when there is real estate involved the court will appoint a probate referee.  The probate Referee is a licensed probate court appraiser and will appraise the value of the real estate and its contents.

3) Estate Administration- In most cases the court will grant the executor/administrator full authority and you do not need to get permission to act on behalf of the estate. Keep in mind that as the representative of the estate you will be held personally responsible for any actions that do not follow the correct procedures.  Don’t worry it is very easy to follow the rules. You simply need to follow the following priority of payments:

  1. Estate Administration - Court fees, admin expenses to manage estate, legal costs etc.
  2. Funeral Expenses
  3. Taxes
  4. Valid Creditor Claims
  5. Distributions To Heirs

Please note that the last priority are the heirs, except if the court grants special distributions to surviving spouse and children for support (typically only if the children are minors or disabled).

Valid Creditors are creditors that are known to the estate or file a creditor claim within 4 months of the letters of authority being issued.  Some creditors even if they don’t file a valid claim may still be able to collect if they had a lien on a property prior to death.

It is not recommended to pay any funds to heirs unless specifically authorized by the court or until the 4 month period for claims is over. A  

4) Notifying Heirs of Actions - As we mentioned earlier most probate cases in CA are unsupervised which means you don’t need court approval to act.  However some actions do require a notification to the heirs. You don't need their approval however they do have the right to be notified and potentially contest an action.  Regular admin actions (paying bills, taxes, fees etc..) do not require any notice, Selling real estate and any distributions to heirs will require notice.

5) Reporting To The Court - You will need to report to the court within 12 months of receiving the letters of authority.  What you need to report depends on the situation:

If More Time Is Required - For many reasons an estate may need more than 12 months to complete the process.  In these cases a simple status report telling the court that you need more time. When you extend time you will simply tell the court why more time is required and how much more time you need, the maximum extension is 12 months.  These extensions can continue indefinitely for legitimate reasons, typically the complexity of assets require extensions. An accounting of the estate will be required, unless waived by the heirs of the estate.

If Estate Is Ready To Close- To close the estate you will simply petition to close the estate and discharge you of the estate responsibilities.  In the petition you will tell the court your actions and what distributions have been made to the heirs. If any assets are left in the estate at the closing, you will include an order of distribution that specifies what will happen to the estate balance.

Whenever you provide any distribution to an heir it is highly recommended that you have them sign a receipt and waiver for that distribution.

Final Accounting- Unless waived by all the heirs a final accounting of the estate is required.  This summarizes every activity (receipts and payments) the estate has made. Even if the heirs waive the accounting (which is very common) it is highly recommended that you keep accurate records and would be able to produce an accounting if ever needed in the future.