Everyone has a will or plan, whether created or by default. Even if you have not made out a will or a trust, you still have a plan – a plan dictated by the laws of the state where you reside upon your death. Making a will is not a way to avoid “probate,” the court procedure that changes the legal ownership of your property after your death. Probate makes sure it is your last valid will, appoints the executor named in your will and supervises the executor’s work. You can do several things now that can help your executor and family later, hopefully much later.
Frequently Asked Probate and Trust Questions
California Probate Code section 10810 sets the maximum statutory fees that attorneys can charge for a probate. Higher fees can be ordered by a court for more complicated cases. The fees are four percent of the first $100,000 of the estate, three percent of the next $100,000, two percent of the next $800,000, one percent of the next $9,000,000, and one-half percent of the next $15,000,000. For estates larger than $25,000,000, the court will determine the fee for the amount that is greater than $25,000,000.
The fees listed below are the California statutory fees used to compensate attorneys and executors in probate cases for various sizes of estates. If both the attorney and the executor receive a fee, the amount paid will be double that shown below. The value of the estate is determined, in general, by the inventory for the estate. (If an accounting of the estate has been waived, the total value of the estate for attorney’s fees purposes is the inventory, plus gains on sales, minus losses on sales.) Debts are not included in determining attorney’s fees, and if a house is appraised at $1,000,000, for example, and it has a mortgage of $800,000, it is still considered a $1,000,000 asset for the purpose of calculating attorney’s fees.
The fee charged to file a probate petition in San Diego is $435. There will be an additional $435 filing fee when the petition for final distribution is filed. Other fees may apply for the publication of the probate notice, for any certification of copies of court documents, and for the probate referee.
Appraisal of the Estate: Estates are appraised by probate referees, who are appointed by the State Controller to determine the fair market value of the asset. The fair market value includes mortgages and other debts, which can result in an appraisal of the property that is higher than the equity that the deceased owned in the property. Probate referees receive a fee based on .001 percent of the assets that have been appraised.
Fees Can Go Higher: In probates that are complicated by lawsuits or tax problems, the attorney and executor can ask the judge to approve fees that are higher than those set by state law.
Advantages of Probate: The proceedings are controlled by a judge, who can decide disputes between heirs or between the heirs and the executor. Creditors are required to submit their claims against the estate within a four-month period, provided they have been notified of the probate. The executor is required, in most cases, to prepare an accounting and report of the executor’s activities.
Disadvantages of Probate: The cost is usually much higher than would be required for the administration of a living trust for an estate valued at the same amount. It usually takes longer to probate an estate than to administer a trust. Most estates don’t need the supervision of the court unless disputes occur.
What is Probate?
When an individual dies, the person likely leaves behind property. Frequently, a last will and testament is also left behind, which indicates how the deceased wanted any property or assets distributed. Consequently, the last will and testament may be subject to probate.
Probate is the process by which the court oversees the administration of the decedent’s last will and testament. When the will is subject to probate, there might be property that must be disposed of pursuant to the sale. This sale is also known as a probate sale.
Sometimes a probate sale is necessary in order for the estate to get money to pay off debts of the decedent, while in other instances, the sale may be done simply to liquidate assets of the estate.
The process involves having a personal representative appointed, such as an executor or administrator. The estate’s personal representative is responsible for settling the claims of creditors, inventorying the estate, paying any taxes that are due, selling the house, administering the house during the probate and then distributing the estate to the appropriate heirs or beneficiaries.
How Long Does the Probate Process Take in California?
The duration of the probate process varies with the size and complexity of the estate, as well as, the difficulty in locating all the beneficiaries. If there is a will and it is contested, or anyone objects to any actions you take as the personal representative, things can really drag out.
The average probate in California – from the date the petition for opening the probate is filed by your attorney to the date that the court orders final distribution of the assets – takes nine months or longer.
I’m certain you’re wondering why so long. In most California counties, it takes 6-8 weeks from the filing of the petition for an estate personal representative to be appointed. Once appointed, the executor or administrator has to give notice to all the creditors and those creditors have four months to file a claim.
After that, the real property needs to be prepared, marketed and sold. Plus, the personal property needs to be addressed. This could take another three to four months, including the notice of proposed action. Handling the real property and the notice to the creditors, can be occurring simultaneously.
Finally, after the property has been sold a petition for distribution at the end of the probate also requires six to eight weeks before an actual order of distribution is signed by the court.
What is a Probate Referee?
The Probate Referee is an officer of the court appointed by the California State Controller. Essentially, their job is to determine a fair market value or an appraisal of the real property (the house). Probate referees receive a fee based on the assets that have been appraised.
You can locate a probate referee by speaking with your attorney or by visiting http://www.ProbateReferees.org.
What Should I Know About Selling Real Estate in a Trust?
Trust sales are different from probate sales because court approval is usually not necessary. But, there may be a legal requirement to give notice to certain interested individuals.
In most cases, a trust sale is very similar to a standard sale, but the trustee is exempt from certain documentation or paperwork needed in a standard real estate transaction.
The trustee must manage the trust estate solely for the benefit of the beneficiaries. The trustee must also keep the beneficiaries of the trust reasonably informed of the administration and has the duty to take reasonable steps to control and preserve the trust property and make it productive.
How Should My House Be Marketed for Sale?
The number one marketing is to other real estate professionals. I believe this, because there are buyers working with real estate agents and when those agents become aware that your house is available for purchase they will let their buyers know.
I entice the agents and their buyers by providing up to 25 photos of the property and a well written description onto the MLS. (I am a member of SANDICOR Multiple Listing Service in San Diego.) My team will also upload onto the MLS all the pertinent information about the property, luring the agents and buyers to want to take the next step and the time to actually look at the property.
You will experience the house listing on many internet sites such as Realtor.com, Zillow, Trulia and more within 72 hours. And, of course, a sign post and sign will be placed on the property.
I will also place a free, recorded message sign rider on the post. This way, interested buyers can simply call the toll free number with your property’s customized code and listen to the information about your property. The best thing about my system is when they call in it will capture their phone number.
Experience shows this to be a much better option than printed flyers because my team can then place a follow up call to the prospective buyer to be sure all their questions about the property have been answered and even schedule a viewing appointment.
What are the Responsibilities of the Personal Representative, Executor or Administrator?
The personal representative, also referred to as the Executor (if there is a will) or administrator (if there is not a will) is appointed as part of the probate proceeding and has the responsibility of managing the estate through the proceeding, subject to established probate rules and procedures.
The executor is nominated in the will. If there is no will, or all the executors who are nominated have died or are unwilling to serve as the executor, state law provides that the decedent’s closest relatives have the highest priority to become administrator of the estate.
Keep in mind that the probate court has a considerably amount of control over the activities of the personal representative and requires that she or he obtain prior permission of the court before performing certain actions such as the sale of the real estate owned by the estate.
What Can I Expect from my Real Estate Agent?
My team and I have a system to handle the transactional details. Just as important, we keep you informed, all along the way. The number one complaint people have with real estate professionals is lack of communication. I have set up a system that keeps my clients up-to-date with the team’s efforts. You can expect to receive, at a minimum, a weekly update. If we have sometime important to share with you, we will call or email you promptly.
On the other hand, if you have a question or concern, or just want to speak with me, simply call (619-741-0111) or email me (email@example.com). I’m here to answer all your questions and address any of your concerns. I want you to feel comfortable throughout our transaction.
This is a designation that any real estate agent can earn by taking a six hour on-line course and passing a 25 question true or false test. This designation is not an indication as to the probate experience of the real estate agent.
As the personal representative of a probate or a trust, you can make decisions that are in the best interest of the estate. Many personal representatives choose to complete my recommended cost-effective repairs. The key is “cost-effective”. It is important that any repairs completed will ultimately increase homebuyer interest and the net dollar proceeds to the estate.
A Title company is usually involved in a San Diego real estate transaction. The Title Company is hired to make certain there are no hidden or unknown problems when transferring ownership of a San Diego property. What are the steps that they take?
- Complete a title search on the seller. This is to determine if the buyer is buying the San Diego home from a person who is legally able to sell the property.
- Complete additional title search to reveal any judgments or liens against the property.
- Determine chain of title; this work involves looking for possible unseen claims to the title of the house.
- Provide title insurance, which is often required by the lending institution. Title insurance ensures the new San Diego buyer will hold a proper and legal claim to the title of the property in San Diego.
- Work closely with a California escrow company so that neither the San Diego seller nor San Diego buyer can claim the money was mismanaged or used for other purposes than closing the deal.
- Once a San Diego buyer and sell come to an agreement, paperwork becomes the driving force that moves the process along. When the purchase of a San Diego home involves a bank or lender to partially finance the purchase, the title and escrow companies coordinate all the documentation. San Diego escrow companies have the responsibility of administering the agreed upon terms of a purchase agreement and securing whatever funds and documents involved in the transaction until the sale is complete.
- In San Diego, the escrow account handles monies or documents once a San Diego home has been sold. This includes the actual cost of the home, title and escrow companies’ services, as well as fees charged by the lender. The escrow account holds these payments until the terms of the purchase agreement have been fulfilled. The San Diego escrow company protects the interests of buyers, sellers and the lending institution.
- Steps are taken to ensure that a potential buyer will have full ownership in the San Diego property. When a buyer applies for a home mortgage, the title company researches the property title to determine whether any liens, lawsuits or mortgages exist or have been placed against the San Diego property.
- San Diego real estate sales involving a lending institution typically requires additional searches to determine if any lawsuits placed against a seller can affect the seller’s actual ownership of the property. The escrow company needs to be sure that the title company does their job to settle existing discrepancies, if possible, and ensure the title is cleared for the official sale of the San Diego home.
- Escrow closing is the final stage of the sale of a San Diego home. The final closing statement known as the HUD-1 settlement statement details all of the costs. These costs include title transfer fees, title recording fees, realtor fees and closing costs that pertain to the sale of the home. This settlement statement will be reviewed for accuracy and then signed by the buyer and seller. Then the title company issues the payment to the seller and finalizes the settlement statement, which closes the sale of the home.
There are three main options to liquidate the remaining personal property. Keeping in mind that as the San Diego administrator or executor to act prudently and maintain a fiduciary duty to earn as much as possible for all the heirs or beneficiaries of the San Diego probate or trust. Experience shows that one of these options will work best for your situation:
- Option 1: Donation
- Option 2: Estate Sale
- Option 3: Buy Out
Detailed market data would be provided. This includes the selling prices of similar properties within 1 mile of the San Diego estate property area, as well as, the currently listed properties (which are your competition). It will include in-depth information on the recent sales in the area, such as price per square foot, condition of the properties and the number of days the property was on the market.
Taking into consideration the information in the analysis, we will be able to determine a listing price that is appropriate for the market, will attract the greatest number of qualified San Diego buyers and cause the house to sell.
Is the paperwork different in a San Diego probate or trust sale than a traditional San Diego real estate transaction?
Yes. In most San Diego real estate transactions, the seller is required to disclose information about the property, including defects such as water intrusion, roof leaks, broken appliances, evidence of pest infestation, etc.
Because sellers of San Diego area real property through probate, trust or conservatorship may never have lived in the property that’s being sold, special disclosure forms take this into account. Probate and trust sales require special disclosures, listing agreements and purchase contracts. The California Association of Realtors has forms specifically for San Diego probate and trust transactions.
Before a lender will loan funds for the purchase of a property, the lender requires professional valuation of the property by licensed appraiser. The appraisal is necessary to support the value of the property for the dollar amount of the buyers down payment plus the loan amount which equals the agreed upon purchase price.
The appraiser will take measurements and notes regarding the property condition and the amenities plus photos of each of the rooms. The exterior of the property will also be evaluated and photographed. Then the appraiser will travel to and take photos of the exterior and consider the amenities of comparable sold properties within a half mile to one mile of the home. And they will also consider one or two pending sale properties.
All of this information is gathered into a concise report and sent to the lender for further evaluation by the loan underwriter. The underwriter will then review all the information prior to determining full loan approval for the buyer.
The cost is a buyer expense between $450 and $600 and is paid in advanced by the buyer.
I’m a big fan of crediting a San Diego homebuyer a reasonable amount of money instead of completing repairs. The primary reasons are that (1) there will be no issues with the quality of work completed; and (2) no one needs to be present to monitor the repairs. A written document between the seller and the buyer should be drafted, detailing the funds credited from the seller’s proceeds towards the buyer’s closing costs. Once signed by the seller and the buyer, the document is given to Escrow and they handle the transfer of funds.
When the decedent leaves a will, an “Executor” is responsible to carry out the directions and requests set forth in that will. Conversely, when a decedent dies “intestate” (i.e., the person passed away without leaving a will), the San Diego Probate Court appoints an “Administrator” to manage the decedent’s estate.