What Is Probate?

ANSWER:  Probate is the court supervised process under which property is transferred from a decedent to the beneficiaries of the decedent’s estate. If the decedent dies testate, meaning he has a Will, the probate court ascertains the validity of the Will and oversees the distribution of the assets in the decedent’s name, subject to certain exceptions explained below. If the decedent dies intestate, without a Will, all of the decedent’s property passes to his or her heirs by California intestate laws of descent.

The probate process requires the filing of a petition with the court in the county where the decedent resided, the notifying of creditors who might have claims against the estate, filing an inventory of assets with the court, filing an accounting of the estate, and court supervision of the distribution of assets.

Not all assets in the decedent’s name are subject to probate. The most common way to avoid probate is to place one’s assets in a trust. If a decedent’s assets are in a trust, those assets will normally pass under the provisions of the trust and will not be subject to probate. In addition, if there is property held in joint tenancy, the property will pass to the surviving joint tenant. Certain bank accounts have “pay on death” or trust provisions which provide that on the death of the account holder, the assets are distributed to a specified beneficiary. Similarly, insurance policies and certain equivalent contracts have provisions which pay on death to a named beneficiary. If beneficiary designations have been filled out for individual retirement accounts, pensions, and certain mutual funds, those accounts are not subject to probate and pass directly to the designated beneficiary of the account, provided that the beneficiary survives the decedent.

Generally, whether assets are subject to probate or not, they are potentially subject to the federal estate tax.

The benefit of avoiding probate is the avoidance of the sometimes long delay of court proceedings and court supervision, the cost of which is not insignificant. In a contentious family, however, there may be a benefit to probate in that individuals with sticky fingers will find it more difficult to enrich themselves at the cost of other innocent beneficiaries while operating under the watchful eye of the court.