Do you know what happens to your possessions after your death when you do not have a valid estate plan? If you don’t have an estate plan when you die, the State of California has one for you. It’s called intestacy, and it is governed by a series of laws in the California Probate Code.
In an intestate estate, unless your estate is worth less than $166,250 (in 2021), your loved ones will have to open a probate in the Probate Court. This calculation includes all assets that are in your name alone (not a joint account or in your Trust) and that do not have a valid Beneficiary designation. In other words, if you own more than $166,250 and you want to avoid probate, you will need to either put your assets into a Trust, name a Beneficiary or have a joint owner for every one of your assets.
PROBATE PROCESS WITH OR WITHOUT WILL (INTESTACY)
Typically, the probate process takes one to two years in California, but can take longer if your estate is complicated or if your family objects. Court closures from COVID-19 and the increased deaths have also extended the process. The probate judge will appoint someone as the administrator of your estate, and the administrator will collect your estate assets, pay off your debts and then distribute the remainder to the Beneficiaries outright at the end of the court case. Your administrator will have very little authority to take actions without the judge’s approval.
Your administrator, your administrator’s attorney and the court-appointed referee who appraises your estate assets will be paid based on the value of the probate estate. There are also court costs such as filing fees to pay.
DIFFERENCE BETWEEN WILL AND NO WILL (INTESTACY)
The biggest difference between an estate with no Will and one with a Will is that if you have a valid Will, you have the opportunity to choose who will inherit your assets and who will manage your estate. In an intestate estate, the people who inherit your assets are called your Beneficiaries, and the people who manage your assets are called your administrators. If you are married when you die, your spouse would be your main Beneficiary and your preferred administrator. If you do not have a spouse when you die, your children would be your main Beneficiaries (in equal shares), and one would be your preferred administrator. If you have neither spouse nor children, your parents would be your Beneficiaries and your administrators, and if you have none of those when you die, your siblings would be your Beneficiaries and one would be your administrator. The pattern continues out from there. (Click here to see the Table on Consanguinity.)
A properly drafted and executed estate plan allows you to choose your Beneficiaries, which can include friends, co-workers and charities. It allows you to determine the amount of your estate that goes to each chosen Beneficiary. With a properly executed Will, you are also able to choose your Executor (administrator).
If you are ready to get started on your estate plan today, click here to start your questionnaire.