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Could Probate Leave Me with a Smaller Inheritance?

Probate is a complex process that can interfere with the distribution of assets to beneficiaries after the death of a loved one. This process is so complex that it can sometimes be unclear how much of an impact it may have on one’s inheritance. Keep reading for more information about California probate, inheritance, and estate laws.

What Is Probate?

After death, the person named in the will – the executor – files documents with the probate court. If there is no will, an administrator is appointed by the court. Once the executor processes the validity of the will or after the administrator is appointed by the probate court, relatives and creditors are officially notified of the person’s death.

The executor is responsible for finding, securing, and managing the deceased’s assets during probate. In many cases this involves verifying ownership of certain assets or liquidating parts of the estate to create funds with which to pay the deceased’s debts. In some cases, the liquidation process may impact inheritance.

It is important to understand that the court is heavily involved in the probate process and may prioritize debt resolution and other legal obligations of the estate over disbursing personal or real property to heirs. 

What Goes Through Formal Probate?

Not all property goes through the probate process. In California, a person may pass up to $184,500 of personal  property without probate. There is also another separate transfer procedure for property left to a surviving spouse. Some estates may qualify for the simplified court procedure while others must follow the formal court procedure.

Formal probate involves extensive evaluations of the deceased’s assets and a multi-step process with the court. Estates valued at more than $184,500 must go through the formal process. The custodian of the will – the person in possession of the will at time of death - must take the will to the probate clerk within 30 days of death and send a copy of the will to the executor. If the executor cannot be found or if one does not exist, the beneficiary must be notified.

If the custodian does not follow these steps, they could face litigation.

The petitioner must start a case in court where the deceased person lived or owned property. The petitioner may be the executor or another party.

Once the petitioner has started a case, they may choose to:

  • Petition for Probate of Will and for Letters Testamentary
  • Petition for Probate of Will and for Letters of Administration with Will Annexed
  • Petition for Letters of Administration

The court will process the petition and set a date for hearing. At the hearing, the court examiner will evaluate the case and assist the court with the disbursement of assets to pay off debts and address other concerns.

Inheritance

In some cases, probate may impact inheritance. If the will designates certain assets to the beneficiaries but does not secure them within a trust or other methods, some of those assets may no longer be available to the beneficiaries after probate is complete.

For assets protected under beneficiary designations, trusts, or titling, beneficiaries may receive the full benefit as intended by the deceased. Property with beneficiary designations like IRAs, 401(k)s, brokerage accounts, and life insurance policies will not go through probate.

Similarly, assets within a trust are safe from probate. Various assets may be protected within a trust and there are several types of trusts available to protect them. Titling allows jointly owned assets to remain with the surviving spouse instead of going through probate.

Takeaway

Probate can leave you with a smaller inheritance if the assets are not protected or if the deceased did not designate them properly. Any assets not addressed explicitly in the trust may be subject to probate depending on their value and ownership.

If you are concerned about the probate process or are considering an estate plan, contact an attorney. At the Law Office of Mitchell A. Port, we understand the emotional toll probate can take after the loss of a loved one. Our compassionate team of legal advocates can help you protect your inheritance and preserve your legacy.

Contact the Law Office of Mitchell A. Port today for more information.

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