Shafae Law

Shafae Law

Shafae Law is a boutique law firm providing comprehensive estate planning, trust, estate, probate, and trust administration services located in the San Francisco Bay Area.

Filtering by Category: Probate

What is... Probate?

This is part of an on-going series of blog posts titled the "What Is..." series, where we attempt to explain, in simple terms, common estate planning terms and concepts. To read other posts in this series, click here.

You’ve probably heard the term probate, and you know there’s something that’s not good about it. But what is it?

Probate refers to the division of the Superior Court of California that handles issues related to conservatorship/incapacity, guardianship, or death. Each county in California has its own probate division.

Conservatorship: Conservatorships are legal proceedings that refer to a scenario where an adult can no longer make her own decisions, such as in the case of dementia or coma. If a loved one becomes incapacitated (e.g. through a sudden car accident, or stroke), someone will need to petition the probate court to be granted the legal authority to act on the loved one’s behalf. With this authority, that person (called a conservator) is able to call the insurance company or handle your loved one’s finances. A few considerations:

  • Conservatorships take time. Each county typically has only one probate judge. So if a crisis arises, and someone needs to be conserved, it can often take 6-8 weeks in a busy county to get that first court hearing.

  • Conservatorships are also expensive. The conservator must show the court that the incapacitated person’s money is being wisely spent. These accountings can take $3,000-$5,000 to prepare. And they’re required to be filed every year, or every other year. That’s not even mentioning the legal fees for hiring the specialized attorney you would need for these types of proceedings.

  • Conservatorships are also public court proceedings. It can often be humiliating to the person being conserved.

Thankfully, you can avoid the need for a conservatorship by planning ahead and creating a durable power of attorney and a trust.

Guardianship: Guardianships are legal proceedings that refer to minor children (anyone under 18 years old) who have either become orphaned or removed from their parents. Those children now need someone with the legal authority to act as the child’s parents. Only a court can give someone such legal authority. By planning ahead, you can nominate in your will who those guardians are in the event guardianship proceedings are necessary for your young children. You certainly do not want to leave such an important decision to the busy members of the probate court who do not know you or your children.

Death: When someone dies, the state needs to ensure that the person’s debts are handled (e.g., outstanding credit card debt, other loans, utilities, funeral and medical expenses), and that any remaining assets reach the dead person’s rightful heirs.

  • Like any other court proceeding, this is a public forum in which your debts and assets are uncovered.

  • Probate takes a long time. It often takes 18-24 months for heirs to receive any of the deceased person’s property. That means that if there are young children relying on their parents’ property to survive, it can take months or years before they see a penny.

  • In addition to the lengthy time that probate takes, it can also be costly. Probate fees--the compensation due to the representative of the estate and her attorney--are set by statute and are calculated based on the gross value of the estate. For example, a $1 million estate in California may generate as much as $46,000 in probate fees!

Most people want to avoid the time, expense, and public humiliation associated with probate court. By creating a comprehensive estate plan, including a trust, will, and power of attorney, you can avoid probate altogether at a fraction of the cost. Don’t wait until it’s too late.


What is... Intestacy?

This is part of an on-going series of blog posts titled the "What Is..." series, where we attempt to explain, in simple terms, common estate planning terms and concepts. To read other posts in this series, click here.

Simply put, intestacy is the word to describe what happens to your property when you die without a will. Intestacy is the state’s default method of determining your beneficiaries. This default is determined by the state in which you reside at the time you die (not the location of your death, say, if you die on vacation). If you reside in California when you die, and you don’t have a will, then the State of California has decided that your property goes to your surviving spouse (if you have one), if not, then to your children (if you have any), if not, then to your parents (if they’re still alive), if not, then to your siblings, then to your nieces/nephews, then to your uncles/aunts, then to your cousins, and on and on and on until someone in your family receives your property.

What if you literally have no other family by the time you die? Well, in that case, if you have no living relatives, the State of California will become the beneficiary.

Some people might look at the above and think,  “Yes! That’s what I would want anyway! So why do I need a will?” A will is more than just how you are giving away your things. It’s used for selecting a guardian for your minor children. It’s also where you would nominate the person who would handle closing all of your final affairs. This person is called an executor. Think of  the person paying for final bills (like an outstanding credit card bill or electric bill), who determines what to do with all of your knick-knacks, and other affairs of a personal nature. If you have a living trust, a will is necessary to ensure that all of the assets you never got around to transferring into your trust end up in your trust (called a “pour over will”).

If you die intestate (remember, that means without a will), none of your friends, girlfriend or boyfriend, or favorite charities will receive anything. Those people aren’t considered your relatives in the default scenario. Also, once your property passes on to someone else, you have no control what happens to it after that. Your property is now a part of that person’s estate and not yours. So, for example, if you wanted your things to go to your nieces/nephews but not to your siblings, you don’t get to control that if you die intestate. Intestacy goes in the order described above only.

The good news is that intestacy is a completely preventable situation! During your life you can create an estate plan (definitely a will and maybe a trust, depending on your situation) that will ensure that your assets go to the people or organizations you want them to go to. You also get to choose who gets to handle all of your final affairs, and to provide to them clear instructions.  

To determine what kind of estate plan you and your family needs, please contact us for a free initial consultation.

What is... a Will?

This post is the first part of a series of blog posts we are launching that we call the "What is..." series. This blog series will explain common estate planning terms and instruments in concise, easy to understand posts.

A will is a document that tells the world what someone wants to happen to their money, their things, and who should care for their minor children when they die.

In a will, you can name specific people you want to receive specific items, like your favorite baseball or a piece of jewelry. You can also name whether you want anyone to get a certain amount of money. (The people you name are called beneficiaries.) You also should indicate what you want to be done with any remaining things or money (your assets) that are left over after you’ve specified what happens.

A will also allows you to designate a guardian for your minor children if you and the other parent die before any child turns 18 years of age.

In a will, you also nominate an executor. This person is responsible for carrying out the wishes listed in your will, paying any outstanding debts (think of the balance on your credit card bill!), taxes, or other cost.

The will does not cover things that have designated beneficiaries built in. For example, a life insurance policy or a retirement plan (401(k) or IRA) allows you to designate a beneficiary. The will does not change who you listed on those accounts.

So why can’t you just write your own will?

Legally, you can. California recognizes handwritten wills when certain conditions are met.  

But here’s the problem: a will only goes into effect when a person dies. It only covers one scenario. For example, a will does not go into effect if a person is incapacitated. A person is incapacitated if he or she is in a coma, or suffers from dementia, or even while under anesthesia in surgery. Essentially, any time someone cannot make his or her own decisions, that person is considered to be incapacitated.

A will also requires that your estate go through probate court. Probate is a court proceeding, and like most court proceedings, it means that your will (including your assets listed in the will) becomes public. It means that your executor has to spend time and money to make sure that your bills and taxes are paid, and that your stuff gets where you want it to go. Probate costs money because there are fees associated with the process, like executor fees and attorneys fees. In California, there’s a statute that states how much money the executor and his or her  lawyer can get in probate.

How can you make sure that you are covered if you’re incapacitated? How can you ensure that you avoid probate? The short answer is that creating a comprehensive estate plan built upon a living trust might be the answer.

To determine what kind of estate plan you and your family needs, please contact us for a free initial consultation at info@shafaelaw.com.

➤ LOCATIONS

303 Twin Dolphin Drive
Suite 600
Redwood City, California 94065

12100 Wilshire Boulevard
Suite 800
Los Angeles, California 90025

 

Office Hours

Monday - Friday
9AM - 5PM

☎ Contact

info@shafaelaw.com
(650) 389-9797
(310) 526-0298