INTRODUCTION
Putting things off until the last minute is usually not a good idea. This is especially true with regards to estate planning. Planning ahead allows a person’s wishes to be refined as time passes. However, not everyone believes that they need to take care of these matters now. They will leave it up to family members to deal with the hardships of probate once they are deceased. That’s because talking about death and incapacity isn’t fun.
The most important concept to grasp when it comes to probate law is that time and strategy are equally important. Sure, simple estates with few assets, debts, or heirs may seem like they do not require much effort, but nothing is simple in court. When property, businesses, children, and administrators are involved, moving forward is decidedly more complex. A probate law firm can help family members sift through their loved ones’ lives and make sense of an already difficult situation.
A probate law firm has the ability to see the bigger picture and how it relates to a specific, personal situation. The firm can devise and execute a strategy that aligns with a decedent’s wishes and goals while skillfully navigating the complexities of the probate code.
WHAT IS PROBATE?
The definition of probate is straightforward; It’s a term used to describe how a person’s final affairs are legally settled after passing away. Probate is a formal process that goes before a judge if the decedent did not have an adequate estate plan in place. Issues that are decreed in court may include:
- How assets will be divided among beneficiaries
- How and which creditors will be paid from the estate
- Who takes over a business owned by the decedent until it is sold or transferred
In short, probate is court supervision of distributing an estate’s assets and liabilities. The proceedings become public record while the estate pays for all filing and probate law firm fees. Understanding the process is essential to a more successful outcome in carrying out your final wishes.
HOW IS PROBATE INITIATED?
The process is started by filing for probate in the county where the decedent resided at the time of death. In general, a person appointed by the decedent will make an appearance with the last will and testament if applicable. This person is named as the personal representative and/or executor in the will. If one does not exist, then it is usually a relative that assumes the executor role. The court will be responsible for approving the executor and may appoint a professional fiduciary in cases of conflict.
The personal representative and his or her probate attorney will petition the court for the probate of the estate. This can be filed in the Clerk of Court’s office of the proper jurisdiction and venue. The clerk will also request the following:
- The original last will and testament
- The $435 filing fee payable to the clerk
- Petition for Probate
After filing, the court will set a date for the personal representative to make an initial appearance. An initial appearance involves an examination of the will, if available, to prove that it is genuine and valid. If approved, then the will is admitted into probate. A California probate law firm can prepare the requisite documents and provide counsel during this important first stage.
As soon as it’s probated, the decedent’s will becomes part of public record. Keep in mind that all filings related to the matter are public, too. These documents are open to evaluation by anybody. The laws in California require public notice of probate in most cases, and your probate law firm can help you complete this task. It can be accomplished by publishing the notice in a newspaper located within the county.
The probate judge will formally appoint the executor, who will then have requested either full or limited authority to serve in this capacity. If limited authority is granted, the executor will require court approval for many acts such as selling real property. This individual is also provided a conformed order and letters that will be recognized by banks and other third-parties. California calls this document the letters of administration.
THE RESPONSIBILITIES OF PERSONAL REPRESENTATIVES AND ADMINISTRATORS
Legal authority over probate offers the personal representative a wide scope of discretion when dealing the affairs of the estate. This discretion includes, for example, property management or hiring a probate law firm. The most important aspect is that the final wishes of the decedent are carried out.
WHAT CAN THE PERSONAL REPRESENTATIVE HANDLE BEFORE PROBATE?
One idea to keep in mind is that the appointed representative or administrator should not act on the will until the court authorizes it. This applies to situations in which the personal representative was named in the will. A probate judge must approve all acts. However, it is perfectly fine to continue:
- Arranging and paying for the funeral
- Caring for minor-aged children and family pets
- Managing owned real estate or businesses as necessary (in a limited fashion)
- Communicating with probate law firms and accountants for assistance
In addition to the core duties, the personal representative will work with the probate law firm to notify all heirs, beneficiaries, relatives, and creditors that a probate petition has been filed. The personal representative’s notification must specify what actions will be taken and when, the court where estate documents are on file, and a copy of the will, if any. The idea is to provide total transparency among interested parties.
FIDUCIARY RESPONSIBILITY TO THE ESTATE
One responsibility of the personal representative is the duty of fiduciary responsibility. In short, this means they must manage the financial aspects of the estate in accordance with the decedent’s terms and for benefit of the heirs. He or she should act with a competent level of impartiality and loyalty to all vested parties and ideally while being advised by a probate law firm. Fiduciary duty includes responsibility over:
- Real estate
- Financial accounts
- Personal property
- Taxes
Beneficiaries can file a lawsuit against the personal representative of the estate if there is a breach of fiduciary responsibility and the personal representative risks being held personally liable. Grounds for a lawsuit usually involve the beneficiaries alleging that the personal representative failed to protect the estate and adhere to the final wishes of the individual. Failure to exercise due diligence is the overarching theme.
MANAGING CONFLICTS OF INTEREST IN ESTATE ADMINISTRATION
In some cases, a personal representative or administrator is named as a beneficiary of the estate. In this scenario, he or she is forbidden from exhibiting patterns of favoritism or making decisions based upon self-interest. This is a common problem. The sad truth is that these violations still happen and almost certainly require a probate law firm to step in and sort through the issues.
How Does a Business Move Forward After a Death?
Small businesses rely heavily on a good succession plan during the estate planning process. The absence of a plan makes it increasingly more difficult to deal with legal issues after death. The best time to establish this plan is before it is actually needed.
Upon death, all business entities become part of the estate. Even under the right conditions, the process to settle business matters without a succession plan can take up a lot of time and money in probate court.
HOW TO EASE THE BURDEN OF PROBATE AND BUSINESS
A misconception that often takes place is that a will addresses the needs of a business after one’s passing. However, a will is not sufficient to address all the needs of a business under these circumstances. In fact, it doesn’t govern how a business moves forward at all. The will only applies to the holder’s personal wishes, such as naming an executor and naming who inherits the business. Don’t let this cause additional headaches, as there are alternatives that address every issue involved with transferring an owned business.
Buy-Sell Agreements
One alternative is known as a buy-sell agreement. This agreement can be put in place to facilitate a smoother transition upon the owner’s death. Buy-sell agreements are binding contracts that exist between owners to address who can buy another owner’s interest, the price paid, and when it can be sold. The buy-sell agreement is most often referenced upon an owner’s death, retirement, bankruptcy, divorce, or disability. A business law firm can assist business owners in creating a succession plan before his or her passing.
Key Person Life Insurance
Key life insurance is coverage for the business by offering a cash injection. The money is based on the decedent’s share from an estate in order to find a replacement. It basically allows the business to survive without its main revenue generator. These roles are usually held by the CEO, CFO, president, or founder.
A Probate Law Firm Moves the Process Forward Strategically
The key to a smoother process is to find a probate law firm in California that focuses specifically in this practice. A probate law firm has the capacity to develop and execute a strategy that aligns with the wishes of the deceased. The probate process will be far more efficient when this is the case.
Conversely, a proper plan can help avoid probate altogether. Let’s face it: it can be expensive, time consuming, and stressful. Developing an estate plan by forming a living trust and healthcare directives allows you to customize your end-of-life wishes while saving your family from going to court and reliving the pain of your passing.
At Kam Law Firm, we bring years of experience to the forefront by working with clients every step of the way. Our firm has been helping people in San Diego County, CA and surrounding areas in the state. Contact our office today for a free, no-obligation consultation by calling (619) 535-1405 or filling out our online form.
