Don’t Let California Probate Laws Deplete Your Estate
California Probate Laws can greatly diminish the value of your estate unless you take steps to ensure that your beneficiaries are provided for in the event of your death or loss of competency before those situations occur. If you die without any provisions at all- without a will or any sort of trust- then you die intestate. In that case, the court will appoint an administrator of your estate who will try to divide your estate up fairly between those who have survived you, but because you left no documents governing the disposal of your estate, your wishes will play no part in the administrator’s final decisions. On the other hand, if you die with a will, you will name an executor, and that executor will ensure that the division of property planned out in your will is carried out in accordance with your wishes. What you may not know is that if you die with or without a will, your estate must go through probate, and the value of your estate will be severely diminished in the process. Even though leaving a will is better than dying intestate, you probably would prefer that your assets go to your beneficiaries instead of letting a large part of them be consumed by the state.
You may not think that the state can take much of your estate, especially if you have prepared a will. You may believe that the probate process only includes a few flat fees, and leaves the remainder of your assets to your beneficiaries. As a matter of fact, the probate fees paid by your estate are determined by the gross value of your estate. Therefore, the greater the value of your assets, the larger your probate fees will be. In addition, the probate fees are based on the gross value of your estate, as opposed to the actual value of your estate. For example, suppose that, before your death, you had purchased a car, and several years prior, you had also purchased a house. Now, further suppose that at the time of your death, your car was valued at $30,000, but you still owed $20,000, and that your house was valued at $570,000, but you still owed $400,000. In that case, your probate fees would be based on the $600,000 gross value of your home and your car, instead of the $110,000 in equity that you had paid. In that case, your estate would have to pay up to $38,000 in probate costs, diminishing the actual value of your estate by over a third. In order to prevent California Probate Laws from diminishing the value of your hard earned estate, you should consider options that prevent your estate from going through probate.
The probate process usually takes between one to two years. Do you want your beneficiaries to have to wait that long to take over your assets? What is some of those assets need immediate attention? Your beneficiaries will not legally be allowed to take over the administration of your assets until the probate process is complete, during which time, the value of your assets may be further depleted due to lack of proper attention. What if your beneficiaries undergo a financial hardship while your will is in probate? If you were alive, you may have helped them, but since you are no longer around, and your property is being probated, your beneficiaries may suffer unnecessary financial ruin, due to the fact that you neglected to protect your assets from the probate process. California Probate Laws can force your beneficiaries to endure many unnecessary hardships due to cost and processing time. Instead of leaving your loved ones to hang in limbo while the state siphons off funds, and diminishes the value of your estate, investigate alternate methods of estate planning that will leave your estate untouched by the probate process.
Instead of drafting a will, which will place your estate at the mercy of the California Probate Laws, an attorney who practices estate planning may advise you to establish a living trust or an irrevocable living trust, either of which will prevent your estate from going through probate, and thus also prevent your estate from being diminished by probate fees. A living trust will ensure that your estate passes directly from you to your beneficiaries without the one to two year delay experienced by those who will their property. In addition, your beneficiaries will be able to access your estate almost immediately, ensuring that the people who are closest to you will be able to maintain and preserve the value of your estate, instead of nameless, faceless government entities who have no personal investment or interest in the preservation of your hard earned property. You may instead choose to establish a joint tenancy, which will also prevent your property from going through the probate process, but that choice also carries a certain risk, as then your property will not be protected from any of the financial or legal risks taken on by the individual you establish as your joint tenant. In addition, your joint tenant will not be obligated to pay anything to any other beneficiaries in the event of your death. Regardless of which choice you make, it is in the best interests of you and your loved ones to consult an estate planning attorney in order to preserve your estate after your death.