How Do You Know If You Need To Go Through Probate?

To determine whether it's necessary to go through probate, total up the gross value of the following assets:

Bank and brokerage accounts
Life insurance (if the beneficiary is a minor)
Business interests
Retirement accounts (if the beneficiary is a minor)
Total other assets
You may exclude the following assets:

Assets administered under a living trust
Assets passing by beneficiary designation, such as life insurance or retirement accounts, where the beneficiary is not a minor
Jointly owned property when the surviving partner has rights of survivorship
Payable-on-Death or Transfer-on-Death accounts
It is not necessary to file for probate when the estate's assets total approximately $160,000 or less.

How Much Does Probate Cost?
The total your family pays in probate fees will depend on how large and complex the estate is.

What Are The Minimum Fees An Attorney Charges For Probate?
Attorneys in California can charge a statutory fee set by Probate Law rather than an hourly rate. They may charge a cost per action, an overall percentage of the gross estate value, or a combination of the two.

The law stipulates the following for attorney's fees, depending on the size of the estate:

4% on the initial $100,000
An additional 3% on the next $100,000
An extra 2% on the following $800,000
A further 1% on the next $9 million
An additional 0.5% of the following $15 million

As you can see, probate fees increase proportionally with the size of the estate. An estate worth $200,000 would require $7,000 in probate fees ($4,000 for the first $100,000 and $3,000 for the next $100,000), while an estate of $25 million could cost as much as $188,000. Law firms may set their minimum charges as they please within these limits.

Services that attorneys may charge for include:

Petition for a health care directive
Conservatorship review charge
Property petition in favor of the remaining partner or spouse
Petition for sale, lease, or grant of option
How Can Estate Planning Help You Avoid Probate Fees?

Effective estate planning can help you to ensure that your heirs receive maximum benefit from your assets and avoid the cost and aggravation that your family will have to endure if they are required to go through probate.

Three popular legal mechanism used for avoiding probate include:

The formation of a revocable living trust: This allows you to place assets under the control of the trustees during your lifetime so that there's no need for a probate court process later.
Joint ownership: if you own assets jointly with someone else, such as a house owned jointly with your partner, in most cases your partner will inherit the asset without the need to go through probate. However, after both of you have passed away, probate would be necessary unless you have established a revocable living trust.
Assigning beneficiaries: One reason life insurance payouts don't fall under probate requirements is that you designate a clear beneficiary when you sign for the coverage. Assigning beneficiaries to retirement and other investment accounts has the same effect. However, if the beneficiary is a minor, this is not an effective way to avoid probate.
These options vary in terms of efficacy. Creation of a revocable living trust that has been designed with the specifics of your family in mind and with a view to achieving your particular objectives is the gold standard.

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