Probate - Is it Required?

One of the primary reasons Living Trusts have gained popularity is the cost and length of court probate.  In Los Angeles, for example the average probate case will take 2 years or more to complete. 

This expense and time delay may, however, be worth it. The purpose of probate is to require court supervision over the process of paying your final debts and distributing your property. During this process, your executor or administrator will file documents with the court on each step of the process.  The court then will have an opportunity to make certain that everything is handled in a legal manner.

Likewise, the probate process provides for protection for the persons who inherit from you from your creditors.  In the probate proceeding, creditors have 4 months after your estate is opened and a notice is published to file any claims.  If they are not filed within this period, they cannot later collect the amounts owed. The court approves the payment of any claims and if there is a dispute, the court will settle it.

Alternatives

A Living Trust does not have to go through the court probate process.  Assets can be distributed immediately and you can determine what, if anything, the person administering your estate should be paid for their services in your trust.

There are some disadvantages to living trusts, however.  Since they are not supervised by the court, there is no guarantee that your estate will be properly handled. There is a provision, however, for beneficiaries to bring the process before the court, however.

Also, the creditor protection available through probate is not available with trusts.   Your successor trustee must make certain that all your proper debts are paid before distribution or creditors retain the right to collect from persons who inherit from you after distribution.

Basically, if you have a person who you can trust to follow your wishes, who is capable of handling the required transactions and who has the time and patience to take care of these matters, you can consider using a living trust.

For more information about steps to avoid probate, click here.

When Is Probate Required?

For a discussion of steps you can take prior to death to avoid probate, click here.  If these steps have not been taken prior to death, the following is a guide to whether a formal probate is required or if alternatives are available.

Probate Not Required
Nature of Assets in Estate	Probate Alternatives
Property passing by contract (Insurance, IRA's, pensions, annuities, etc.)		Contact the insurance company, financial institutions, employer, etc. to complete their forms
Joint tenancy property		Clear title, joint tenancy deed, etc.  No probate required
Estate value less than $20,000, decedent leaves surviving spouse and/or children		File Petition with probate court to set aside estate
Property passing to surviving spouse		File Spousal property Petition with court	or	File formal Probate proceeding with court
Where none of the above apply		Where gross value of estate is less than $100,000		File petition for order determining succession to property, or for personal property only, collect assets from holder with an  affidavit under Section 13100
		Where gross value of all real property does not exceed $20,000		File an affidavit with holder of real property under section 13200

In all other cases, a formal probate proceeding is required.  

Note:  In all cases, the holder of a will must file that will with the superior court clerk in the county where the decedent resided within 30 days of death and must give notice to the person(s) named in the will as executor.  No other notice is required to be given of the will, unless probate proceedings are commenced.