Newport Beach Probate Attorney
The death of a loved one in Newport Beach can be an emotionally difficult and taxing time. Not only must you figure out how to live without the decedent, but you may also be involved in the probate process if your loved one left any part of their estate to you. You may be even more deeply involved if your loved one named you the executor of their estate. As an executor, you are likely to experience the probate process. Unfortunately, this process is extensive and complicated. It typically requires experience within the probate court system to handle effectively.
For more than a decade, The Flanigan Law Group has supported Newport Beach and surrounding area residents with their probate needs. Our unique and tailored approach allows us to provide our clients with customized solutions. We work to protect their interests and those of their families. Because we focus primarily on estate planning, probate, and estate litigation, our entire staff has significant experience in these areas. This gives us the foresight and perspective required to avoid litigation and legal disputes.
What Is Probate?
Probate refers to the legal process through which a county court processes a decedent’s assets. These are eventually distributed to the appropriate beneficiaries according to their last will and testament or applicable law. The probate process should:
- Determine if a valid will exists.
- Figure out the worth of the decedent’s property and assets.
- Identify the deceased’s heirs or beneficiaries.
- Close out the decedent’s financial responsibilities by paying any outstanding debts.
- Liquidate assets if required.
- Pay the decedent’s and the estate’s taxes.
- Transfer the applicable property to the heirs or beneficiaries.
During a probate case, an appointed person must act as a personal representative. They will collect and determine the value of all the decedent’s assets and property. They will then pay the debts and expenses of the decedent. Finally, the representative will distribute the remainder of the estate to the identified heirs or beneficiaries if they have a legal right to inherit. If the representative was identified by the decedent in their will, they are termed an executor. If there is no will, an administrator is appointed by the court.
Types of Probate
There are varying levels of probate for estates in Newport Beach. A few of these probate types are:
- Formal Probate
This is the most time-consuming and expensive type. Formal probate may last 9 to 12 months at a minimum. The cost is based on the percentage of the fair market value of the estate subject to probate.
- Ancillary Probate
This type of ancillary probate applies when the deceased died as a non-California resident. The deceased’s estate is being administered in their home state, but they owned property in California. Since the deceased’s home state does not have any jurisdiction over property within California, ancillary probate is opened. This turns the property over to the estate administrator.
- Summary Probate
Summary probate is an expedited probate. It typically avoids the high fees associated with formal probate. A summary probate may be available to the executor if:
- The market value of the property subject to probate is less than $184,500 (as of 2023).
- The decedent meant to transfer the property to a trust but failed to complete the process.
- The property is to pass to their surviving spouse.
How Probate Affects the Estate
Probate is not necessarily required after an individual’s death. However, if the estate does go through probate, different types of property and assets will be affected differently. Once the probate process has begun, the following asset types are typically subject to probate:
- Assets that are in the decedent’s name alone
- Half of the assets owned by the decedent and their spouse as community property
- Personal property assets
- Property owned by the decedent but not registered as personal property, such as jewelry, furniture, etc.
- The deceased’s share or portion of an asset that is owned as tenants in common with other people
Assets not typically affected by the probate process include:
- Assets held within a living trust
- Assets that are held in joint tenancy with another individual
- Assets where the beneficiary is named, such as IRA benefits or life insurance
- Assets in a savings, banking, or loan account in the decedent’s name that are deemed payable on death or transferred on death to another person
As an executor without prior probate experience, it can be difficult to determine which assets will be affected by the probate process. Speaking with an experienced probate attorney can provide valuable insight into how the decedent’s estate will be affected.
Reasons to Avoid Probate
Probate is often considered a situation to avoid because it can cause multiple complications when distributing property. Potential reasons for avoiding probate include:
- Unnecessary Delays
Probate is a court-administered procedure. This means that numerous forms and documents must be filed with the court. Also, some processes must be overseen by the court. Complex cases are likely to require multiple court appearances. This can extend the process even longer as you wait for openings in the court schedule for your case to be heard. As a result, it usually takes anywhere between 6 months and 2 years for the property to be transferred to the intended beneficiaries.
- Extra Expenses
Probate can be a complicated process. It usually requires the assistance of an experienced probate lawyer. Additionally, an estate administrator is appointed to direct the procedure on behalf of the decedent’s beneficiaries or heirs. Both the attorney and estate administrator are entitled to payment from the estate for their time. The fees for a probate attorney and the estate administrator are set by the state of California:
- 4% of the first $100,000 in assets
- 3% of the next $100,000 in assets
- 2% of the next $800,000 in assets
- 1% of the next $15,000,000 in assets
There will also be court fees and expenses that can total several thousand dollars. Appraisal fees can equal as much as 0.1% of the total value of the property.
- Loss of Control
A judge who is unfamiliar with the decedent or their family will decide how the assets and property will be distributed. Someone may look like an obvious choice to be a recipient. However, they may not have been someone the decedent would like their property transferred to. Although a Last Will and Testament will show the judge the decedent’s intent with their estate, the judge will have the final say in whether the document is followed as written.
- Exposure to the Public
All documents pertaining to the transfer of property must be filed with the court, making them available for public review. This means the value of the decedent’s estate is subject to public disclosure, as are the intended beneficiaries and the conditions on their receipt of the assets.
How to Avoid the Probate Process
There are multiple legal ways to bypass probate when a person is deciding how to divide their assets after their death. One method is the summary probate procedure. State law sets a limit on the value of an estate that will be subject to probate. An estate with a value less than this limit will not be subject to probate. For a person that died prior to April 1, 2022, the estate value threshold is $166,250, and for a person that died on or after April 1, 2022, the estate value is $184,500. A few of the other potential methods are:
A person can transfer some of their property to others and avoid owning that property at the time of their death. An inter vivos, or lifetime, gift can be used for some assets to avoid being subject to probate. There may be income tax and gift tax effects to be considered when gifting individuals who are part of an estate.
- Right of Survivorship
Through the California Civil Code, property owners are allowed to designate who will receive their property upon their death through the title. Two individuals can both hold a title to an asset in joint tenancy. This condition includes the right of survivorship. This means any joint-tenancy property will automatically transfer to the surviving individual. It will be owned by them in its entirety without passing through probate. Joint tenancy is different from community property in that it always includes the right of survivorship, while community property does not. The decedent’s portion of the community property without this designation will be subject to probate. It will then be controlled by the will or probate process.
Any property or asset placed in a trust will escape the probate process. A living trust allows the trustee to retain control of their property while also designating beneficiaries after their death. Real estate, vehicles, bank accounts—virtually any asset you own—can be placed into a living trust. If a trust is created, it is important to transfer ownership of the property from the trust’s creator to the trust.
A Newport Beach estate planning lawyer can examine your situation and help protect your assets, ensuring your property is divided the way you intend.
Unresolved Debts and Probate
One of the mandatory steps that occurs during the probate process is sending notices to any potential creditors of the individual’s death. During California probate claims, anyone executing an estate is required to:
- Promptly send notice to the decedent’s creditors.
- Allow sufficient time for creditors to establish their claim.
- Approve or dispute the creditor’s claims.
Potential creditors are given 60 days from the date that an executor sends notice of the probate process to file a claim. If an executor was not named by the decedent, creditors are given four months after the probate court appoints an administrator to act on a debt. Creditors are given the first opportunity to stake a claim on a decedent’s assets. This is partially because they cannot hold the decedent’s heirs or beneficiaries responsible for the debt. Creditors must settle their claims with the estate prior to its being distributed among the named recipients.
Exceptions to this rule are jointly held assets or assets that are considered community property. Both federal and California laws prohibit creditors from demanding recompense from a decedent’s relatives. However, they can attempt to recoup their losses from the other person on accounts that demonstrate joint responsibility. For example, if your name was on a credit card with an outstanding balance belonging to the decedent, or you cosigned with the decedent on a loan, the survivor could be pressed to make payments. The same is true for community property that is transferred to the surviving spouse.
Creditor Priority List
California law has established a creditor priority list to determine the order in which an estate executor is required to pay the creditors. This list is intended to ensure that entities with the most pressing claims have the greatest chance of recovering the debt they are owed. The probate code has seven classes:
- Administrative expenses related to executing an estate
- Secured debts, deeds of trust, and liens
- Funeral expenses
- Medical expenses, if the cause of death was illness
- Family allowances
- Wage claims of up to $2,000 by employees or contractors
- General debts that are not previously specified
Because the list of creditors can be exhaustive, estate executors may find it beneficial to speak with an experienced probate attorney. This may be the ideal route to protecting assets that the decedent wanted to be transferred to heirs and beneficiaries.
Newport Beach Probate Attorney
Whether you have been identified as an estate executor, or are creating a plan for your own estate, a skilled probate or estate planning attorney can make a significant difference in the outcome. Not only can they assuage your fears of the process, but they can also protect your assets by providing creative solutions for your situation.
The Flanigan Law Group is committed to efficiently and seamlessly seeing the probate process through on your behalf. This can save you the time, money, and heartache associated with the court system. We can take the time to help you understand the upcoming steps. Our firm can ensure that you understand the legal side of the process while you handle the emotional side. If you are searching for a superior probate legal team, arrange a consultation with our office to discuss your circumstances and options.