Probate is the court-supervised process for transferring legal ownership of a deceased person’s assets and settling their debts and other financial affairs. Probate may require paying debts and distributing the decedent’s assets according to their will or state default rules if there is no will.
If no one files probate for an individual who has died and owned assets in California, the court can freeze the decedent’s assets, making them inaccessible to heirs and other beneficiaries until debts are paid. The executor may be subject to civil penalties, face criminal charges, and incur financial liabilities. Without any legal authority, institutions holding the decedent’s assets will be unlikely to transfer assets to the decedent’s loved ones, so these assets may not be accessible to the surviving family.
Understanding California Probate
Probate law protects creditors who are owed money by a person who dies, including the taxman, as well as beneficiaries of the decedent’s will or family members who become legal heirs in the absence of a valid will.
Typically, a survivor of the decedent files for probate, which in California requires submitting the completed petition for probate form, the will (if one exists), and the decedent’s death certificate. The probate court will usually appoint the executor of the will to serve as “personal representative,” or administrator, of the estate. Without a will, a close relative or another qualified adult heir may be appointed to serve as the personal representative of the estate.
The personal representative is required to protect the estate’s interests, pay its debts and execute and account for the distribution of the estate’s assets as directed by the will or by California’s rules for intestate succession. Probate must be completed within one year of the date of death, or the estate will be subject to penalties.
Any assets owned solely by the decedent, not part of a living trust and not payable upon death or transferred to a named beneficiary upon death are subject to probate.
Such assets may include:
- Bank or investment accounts
- Stocks and bonds
- Vehicles (cars, motorcycles, boats, airplanes, etc.)
- Business interests
- Real estate
- Other personal property or household items
Consequences of Not Filing Probate in California
Probate is a process for beneficiaries of a will to inherit property or other assets promised to them. Not filing probate stops the process from moving forward.
In probate, the court is interested in seeing all of the estate’s debts and taxes paid before allowing assets to be distributed to beneficiaries of the decedent’s will. The personal representative must pay bills with assets from the estate, including by selling off assets to raise funds if necessary, and submit a full accounting of debts and payments made to the probate court.
If the estate is not submitted for probate and creditors are not paid in a timely manner, the court may:
- Freeze the estate’s assets until all debts are settled
- Hold the estate’s beneficiaries – as new owners of the estate – responsible for the estate’s unpaid debts
- Remove the executor of the will or the appointed personal representative from their position of authority over the estate
- Appoint a conservator of the estate. This person may be an officer of the court, someone not connected to the family who is given responsibility for managing the estate. Family members and other beneficiaries of the estate will no longer have a say about what happens to the estate and its assets. For example, the conservator may decide to sell certain property to pay debts, with no regard for what the loss of that property may mean to family members.
- Impose civil sanctions. Failure to complete probate within one year of the decedent’s death makes the estate subject to late fees and penalties. The money the estate pays in penalties decreases what’s available to the estate’s beneficiaries.
- Recommend criminal charges. An executor who deliberately avoids probate or mismanages an estate entrusted to them could be charged with a criminal offense and face jail time, fines, and other penalties. For example, someone who unlawfully takes assets from the estate could be charged with theft, embezzlement, or fraud.
When is Probate Required in California?
The decedent’s executor or someone else close to the deceased should file for probate if:
- There are debts to be paid with the decedent’s money
- There is a need to set a deadline for creditors to file claims
- The decedent owned real or personal property or financial assets that may be transferred to others – with or without an existing will – that exceed a certain amount
Assets like life insurance policies, retirement plans, and bank accounts set up as pay-on-death accounts (PODs) or “in trust for” accounts with a named beneficiary do not have to go through probate to be transferred to the beneficiary.
Real estate may be transferred without court if there is joint ownership – both spouses’ names on the deed, for example – or a transfer-on-death deed (also called a “beneficiary deed”). Surviving spouses also automatically inherit property held in joint tenancy with the right of survivorship or as community property.
Property held by living trusts is generally transferred to named beneficiaries or secondary trustees without going to court.
Alternatives to Probate in California
California has “simplified procedures” for transferring property from estates worth less than certain amounts. If the decedent’s real and personal property is worth $20,000 or less, their spouse or minor children can ask the court to “set aside” the estate instead of requiring it to go through probate.
If the decedent’s personal and real property is worth $166,250 or less, a relative can collect it and distribute it to the heirs (or the beneficiaries named in the will) by using a declaration. This method is called the Section 13100 Procedure and has specific rules and exceptions that must be followed.
Another exception exists to allow the transfer of real property in California that is worth $50,000 or less, which requires California Judicial Council Form DE-305, Affidavit Re: Real Property of Small Value ($50,000 or Less).
If you think you may be able to take advantage of any of these simplified procedures, you should consult an experienced California probate attorney.
Contact Our California Estate Litigation Attorneys
If you are the beneficiary of an estate that is not being handled properly by the executor of the will or an appointed personal representative, the aggressive estate litigation lawyers at Albertson & Davidson may be able to help you. We fight against beneficiary abuse by filing will contests and other probate litigation.
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Albertson & Davidson maintains offices in Los Angeles, Bay Area, Orange County, and Silicon Valley to serve clients throughout California. Contact us today at (877) 632-1738 or online for a free and confidential consultation.
