Probate is a legal procedure which takes place when an individual dies owning assets. (See below about how to avoid this). This could be as little as a total of accounts of $100,000, or a house with a market value—not equity—sale price value of over $20,000. So if you own a house in California (you couldn’t find one at this price), your beneficiaries will have to go through this process.
It is a very long, complex proceeding which is also very expensive. Consumers as well as attorneys, describe the procedure as the “agony” of probate. To give you an idea: an estate of $400,000, which might include a home worth $275,000 (with or without a mortgage or deed of trust against the property—it doesn’t matter), household goods of $25,000, and miscellaneous CD’s and bank accounts totaling another $100,000 would amount to a $400,000 estate.
The costs for attorney and executor fees would be $ 22,000 plus court filing fees, probate referee fees, accountants, and appraisers as well. There would be extraordinary fees for the sale of property and if it involved litigation, the costs could skyrocket.
How To Avoid Probate
THE BEST WAY OF AVOIDING PROBATE IS TO HAVE A LIVING TRUST. A Living Trust done by a knowledgeable attorney (who knows all of the “what if” questions to ask you) is the best way. Having an incompletely funded Trust or one with faulty language can be worse than no trust at all.
The Probate Court (which you were seeking to avoid) has jurisdiction over such “flawed trusts”–and your loved ones would be worse off than if you had no Trust at all.
If you are married you can avoid a full probate on the first death by holding assets as community property with right of survivorships. However, either way, the beneficiary will shall be a full probate on the second death.
Probate can be avoided by holding assets as joint tenants. Click here to see negatives.
Read more on how to avoid probate.