Question: When is Probate Necessary?

A frequent question that real estate agents and heirs ask me: "Is probate really necessary?" The reason they ask the probate attorney this question is because they have heard that a probate is very expensive and time consuming. How expensive and time consuming is it? If a house gross value is $500,000, then the total cost of probate will be approximately $29,000 and it takes about one year to complete the probate court process. No heirs really want to go through a probate. This article will give a brief summary elucidating when a probate is necessary in California. Probate is a title clearing process. If you own a house in California and you die without a living trust, your heirs or beneficiaries will have to engage the probate court to transfer the title out of your name into theirs. The magical threshold amount is $150,000. In general, if you die and your estate gross value is more than $150,000 then a probate is necessary. However, if a house is titled under joint tenancy or community property with right of survivorship, then a probate is only necessary upon the death of the surviving joint tenant or the surviving spouse. If you have cash that is more than $150,000 held in a pay on death account then a probate is not necessary because you have a contractual agreement with the bank to give that money to the designated "beneficiary" upon your death. If your children are to receive one million dollars in life insurance proceeds, then no probate is necessary because there is a designated beneficiary in place. If you own real property with value that is less than $150,000 and you don't have a living trust then no probate is necessary but some court involvement is necessary. If the real property value is $50,000 or less then you have to file a form called "Affidavit RE Real Property of Small Value" (Probate Code 13200).

However, if the real property value is more than $50,000 but less than $150,000 then you have to file a form called "Petition to Determine Succession to Real Property". With both of these forms, you must get a probate referee to value the real property. If the value of the house is more than $150,000 and you do not have a living trust then a probate is needed. However, from time to time, a married person or a domestic partner may have his or her name on the grant deed alone. The surviving spouse name is not on the grant deed. Is a probate necessary when that spouse or domestic partner whose sole name is on the grant deed dies? I have many surviving spouses and domestic partners tell me that they have been married for many years and for one reason or another the house is titled only under that deceased spouse's name. The answer as to whether a probate is needed or not hinges on the concept of community property and California Probate Code Section 13500-13660. California is a community property state and a house that is bought using community money is considered community property. Thus, if a married person bought a house after he or she got married using community funds, there is a presumption that the house is a community house. California Probate Codes 13500-13660 allow property of any value passing to a surviving spouse without a probate. Therefore, if a married person bought a house after marriage using community funds under his or her sole name on the grant deed then a probate is not necessary but instead the probate attorney will file a form called "Spousal Property Petition." This form is very useful because California law allows the house to pass to the surviving spouse or domestic partner without a need for a formal, expensive and lengthy probate. Come learn more at my 3 hours probate training for REALTORS.

Article compliments of:
Paul Horn
Attorney & CPA
email@startbkemail.com
(800) 380-7076
www.LearnProbate.com
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