Estate and Probate Planning FAQs

Estate planning is putting your financial and personal affairs to get the maximum benefit from your estate. At the same time, you are alive, so when you die, your chosen beneficiaries – who may differ from your default heirs under the law – can enjoy your gifts with the least hassle and delay. If your estate is large enough, estate planning can also help avoid estate taxes. Estate planning can include:

• Financial planning.
• Preparation of wills.
• Execution of a trust.
• Preparation of an annuity.
• An investigation into Medi-Cal and social security benefits was even conducted.

A will and a trust are different instruments that can direct what happens to your property when you die. A will only take effect when you die. A trust takes effect during your lifetime. The executor is the person who handles the will. The trustee is the person who handles the trust. They can be, and usually are, the same person when you have a trust with a pour-over will.

The law specifies who your heirs will inherit your property if you die intestate without a will (e.g., your spouse, children, parents, or other relatives, depending on who outlives you and whether they had their children). In a will, you can designate different people instead of your heirs to receive your property. If you have a trust, you will specify in your trust what you want to happen with your property when you die. If you have a trust, you would also have a will, usually a “pour-over will” that leaves everything not already in your trust to your trust at your death.

If you die intestate or with only a will, your estate must go through probate if it exceeds a specific value. Estates that are part of a trust usually do not have to go through probate, which is one of the main reasons people with modest estates will have a trust. The idea of a trust is that you are putting someone else in charge of your estate. Most people with modest estates name themselves trustees while they are still healthy, with successor trustees nominated to take over when they get sick or die.

The executor is the person who handles the will. The trustee is the person who handles the trust. An executor is a person you name in your will to handle the distribution of your property under the terms of the will. You may have also seen “executrix” used for a woman with this job. If you don't name anyone, someone must volunteer for the job. That person, once approved by the court, would be the administrator. Executors and administrators are both “personal representatives.” Usually, but not always, people with a trust will name the same person as the executor as they name the successor trustee.

The trustee is the person in charge of the trust. If you die while you are your trustee, your successor trustee will take over the administration of your estate. Or, if your health was failing, you may have already resigned as trustee before your death. Either way, the successor trustee will wind up your affairs and distribute your property according to the terms of your trust. Suppose you held any property outside your trust. In that case, your trustee will handle any procedures that may be necessary to make sure that this property is recognized as trust property or gets “poured over” into the trust according to your will. This may or may not require a court procedure, depending on the terms of the trust and the type and value of the property.

Your trustee can have vast powers to buy, sell, invest, etc. – almost always as much energy as you would have to manage your estate, which is the point. A trust will have a particular set of instructions for the trustee to follow while you, the “trustor,” are still alive and a separate set of instructions for what to do when you die. If you are married, you can have a joint trust with your spouse or a separate trust that only deals with your individual property and your share of your community and quasi-community property. A joint trust will have instructions for what to do during the joint lifetimes of the trustors, after the first death, and after the second death. These instructions usually include provisions to take advantage of any tax deferment at the time of the death.

Real Property, or Real Estate, is your land and everything attached to it. Real property law governs the legal aspect of anything you can do with or to real property, including leasing, buying, or selling it; developing it and building on it; granting easements to allow people onto it; or creating restrictions to prevent certain uses.

Probate Court is the part of the state court that administers the estates of people who have died and of people who are incapacitated and need someone appointed to care for their needs (i.e., a conservatorship). Usually, when people refer to “going through probate,” they mean the process of administering the estate of someone who has died. You can avoid probate in most cases by planning ahead of time with the proper legal documents, like Powers of Attorney and Trusts.

The court guides the Probate process according to the laws of the California Probate Code. It is public, requires fees set by statute, and takes time. If you die without a will or with just a will but no trust, your estate will go through probate if the value of your estate is above a certain amount set by law ($184,500.00 in 2024 and adjusted for inflation every three years).

By creating a trust, you can choose to have your estate distributed to your beneficiaries by your trustee without using probate. The trustee must still follow the law (e.g., the trustee must pay your debts and notify your heirs) and can use the court to address any questions that may arise, but the court does not oversee the process in the way it does with a probated estate. The distribution is private and may go more quickly with a trust, depending on the estate's assets. Generally, the trustee is allowed a “reasonable fee” for their services rather than a payment of the statutory fees of probate.

Some people may prefer the open, court-monitored probate process or feel that the size of their estate differs from having a trust. With enormous estates, most people prefer to avoid probate and to use a trust to avoid paying the statutory fees, to minimize federal estate taxes, and to keep the process private. But keep in mind that, with the price of real estate these days, if your house is not held in a trust, your house alone would likely cause your estate to exceed the threshold for requiring probate.

The California Probate Code Section 10810 sets forth the compensation for ordinary services by an attorney for the estate's personal representative. The personal representative may be entitled to the same compensation unless there is a will stating how much, if anything, the personal representative should receive. The personal representative must file an inventory and appraisal with the court, and the attorney’s ordinary compensation is based on the appraised value.

For 2024, the compensation for the attorney is:

1. Four percent on the first one hundred thousand dollars ($100,000).
2. Three percent on the next one hundred thousand dollars ($100,000).
3. Two percent on the next eight hundred thousand dollars ($800,000).
4. One percent on nine million dollars ($9,000,000).
5. One-half of 1 percent on the next fifteen million dollars ($15,000,000).
6. For all amounts above twenty-five million dollars ($25,000,000), the court must determine a reasonable amount.

For example, the attorney compensation on an estate of $500,000.00 would be $13,000.00. Any agreement between the attorney and the personal representative for the attorney to get more money is void. However, if the attorney must perform out-of-the-ordinary services, the attorney may seek approval from the court for additional compensation for extraordinary services. The will may state that the attorney should get a specific compensation instead of the statutory amount.

In a conservatorship, the court can appoint a guardian of the person, a guardian of the estate, or both for someone over 18 who cannot manage his or her care, finances, or both. A concerned loved one will often petition the court to allow the conservatorship. Still, sometimes a public conservator will be appointed if no concerned friend or relative will take responsibility for the person. You can use Power of Attorney documents to give legal authority to an agent to act on your behalf, much the way a conservator would, or to nominate a conservator should you need one.

By using a document called “Power of Attorney” (or "POA"), you can grant authority to someone else to make decisions on your behalf. Powers can be broad or limited but are generally divided into financial and healthcare decision categories. For example, if you are going to be out of town on the day you and your spouse are supposed to sign your new mortgage papers, you can grant power of attorney to your spouse for just the documents related to the mortgage and for just that day. If you are going on a dangerous trip, you can grant one of your travel companions power of attorney for health care to make decisions regarding your medical care if you get injured. One familiar use of POA is when an older person grants the authority to one of his adult children to do the shopping and pay the bills using his money.

The person who grants power of attorney is called the principal. Traditional powers of attorney are only effective when the principal is still capable of making their own decisions (i.e., has capacity) because it is assumed that the agent is carrying out the principal’s wishes; that is, the principal is telling the agent what to do.

Most people will grant “durable” powers of attorney in estate planning, meaning the agent’s powers don’t expire when the principal becomes incapacitated. With a durable POA, the principal trusts the agent to act with the principal’s best interest in mind, even though the principal may not be able to direct the agent anymore. Frequently, especially with non-spouse agents, these durable powers of attorney are “springing” powers of attorney for finances and health care; this means that the powers will only “spring” to life when the principals become unable to make their own decisions, a decision that is usually made by one or more of the principals’ doctors or family members.

With durable powers of attorney for finances and health care, you can give the same power to your chosen agents that a conservator appointed by the court would have. In this way, you can use powers of attorney to avoid having a conservatorship.

If you have minor children, you should have an estate plan that nominates a guardian for your children in case something happens to you before they turn 18. Even if you are married, it is good practice to appoint a guardian if something happens to both of you. Because this would be a significant undertaking for the nominated guardians should the need for guardianship arise, it is a good idea to talk it over with your proposed guardians to ensure they would be willing and able to care for your children.

The threshold for the probate of an estate in California is $184,500.00 (in 2024) and is indexed to inflation. With some exceptions, if you own real property in an urban or suburban area of a major city, your real property alone will likely exceed that threshold, even before you add your bank accounts, jewelry, and other assets. Because the probate fees are set by statute, you might want to avoid these fees by having an estate plan that includes a non-probate trust.

A will is a document that directs what should happen with your property when you die, while a “living will” is a document that directs what should happen with YOU while you are alive but when you might be unable to make your own decisions. The “living will” form in California is an Advance Health Care Directive or “AHCD.”

In an AHCD, you can instruct your caregivers on which medical treatment you do or do not want to be performed on you in certain circumstances. For instance, you might wish for every kind of machine, feeding tube, and experimental surgery to keep you alive as long as possible, or you might want very little done and prefer nature to take its course. You may have religious preferences that guide your health care and end-of-life decisions. You may wish to donate your organs, which could mean keeping you alive long enough for that to take place. It is up to you, but unless you have it in writing, it will be difficult for medical personnel to follow your wishes – especially if your family members have opinions that conflict with yours and each other’s.

Another piece of the AHCD allows you to designate an agent with power of attorney for health care decisions. Like a financial power of attorney, the health care power of attorney can be “springing” – meaning your agent’s power only begins when you become incapacitated – and will usually be “durable,” meaning that it continues in effect after you become incapacitated.

You can give your doctor and designated agent a copy of your Advance Health Care Directive. Many people carry a card in their wallet with a summary of their health care directive. If they have an agent for health care under a power of attorney, this card will have the agent’s name and phone number in case of emergency.

The Secretary of State maintains a registry of advance health care directives in California. For a small fee ($10 in 2024), you can submit your directive to the registry, accessible to healthcare providers throughout the state. It would be a good idea to inform your loved ones and a neighbor or two of the existence of your advance health care directive and the name and phone number of your agent for health care if you have one.