Administering and Executing Trusts & Estates
Estate planning is what people do while they're still alive and able to make their own decisions about things like property distribution, guardianship of minor children and health care instructions by creating estate plans including a living trust and/or will, power of attorney, advance health care directive, nomination of guardianship, and so forth.
But ultimately, each one of us will eventually pass away. Probate and estate administration is what happens after we die.
Trust Administration – when a person dies (we call that person the "Decedent") and he/she had a Living Trust, the process of following his/her estate instructions is called Trust Administration, and the person who administers the Trust is called the Trustee. With a properly prepared Trust estate plan (and if the Decedent followed that plan), the Trustee can generally just carry out the instructions spelled out in the Trust document itself without ever having to go to Probate Court. Sometimes court is unavoidable, such as the appointment of guardians for children, but the Decedent's instructions carry substantial weight for the Judge to consider. Trust administration can often be completed in as little as 4-5 months, sometimes much quicker.
Will Execution – when the Decedent dies with a Will in place, the process following his/her estate instructions is called Will Execution, and the person who carries this out is called the Executor. Unlike a Living Trust, however, a Will must be executed through the Probate Court process. The Executor must "prove up" the Will – convince the Judge that the Will is authentic and reliable – and then must follow a series of steps and meet deadlines all specified by statute, and must generally seek permission from the Court to distribute assets or sell property. With a Will in place, probate can be orderly and straightforward, but it can take anywhere from 8-18 months to complete.
And probate can be very expensive. In California, probate attorney fees are based on a percentage of the gross (total) estate value (without considering debts, mortgages, taxes owing, etc.). An estate as small as $200,000 – which is not very large considering the median price of a home in Northern California is $750,000 – can generate attorney fees of $7,000. A typical estate worth $900,000 will generate $14,000 in attorney fees. And to top that off, unless the Will specifically prohibits it, the Executor receives exactly the same compensation as the attorney. So that typical $900,000 estate actually will cost $28,000 in attorney and Executor fees, plus several additional thousands of dollars for court costs, publishing costs, and appraisal fees.
Estate Administration – when the Decedent dies without a Trust or a Will in place, then we say that he/she died "intestate," and the process is called Estate Administration. Intestacy is the worst of these options. Not only does an intestate estate have to go through the Probate Court process, but often times the Decedent's family members argue and fight in court over who should be the estate Administrator.
Because there are no written instructions left by the Decedent, his/her wishes are irrelevant. Verbal promises made here and there over the years, or the Decedent's wishes that Johnny should get the house and Susie should get the RV, cars, and everything else, are meaningless. That's because when the Decedent leaves no estate plan at all, the State of California steps in and follows the distribution rules that are set forth in the Probate Code, without much leeway to deviate from those rules. That may leave the distribution of the Decedent's property, and the care of his/her children, quite different than what the Decedent may have actually wanted.
And to add insult to injury, the legal fees for an instestate probate case are exactly the same as for a will-based probate case.
Please browse our site and all of the information it contains regarding wills, trusts, and the process of probate and estate administration. You can click the subjects in the sidebar to the right (in your computer browser) or down below (on your phone or smart device) to learn more.
WE'RE READY TO HELP
California Will & Trust is here and prepared to assist you when you need us. We'll help you take control of your future and put together that Will or Living Trust estate plan you've been meaning to create. We'll stand by your side and guide you through the Probate process or administering a trust if your loved one or friend has passed away. And we'll help you face the challenges of a family law matter. You can either get started online using the links on this website, or you can call us at (707) 207-4500 or (925) 465-2500.