What is included in the estate for purposes of calculating maximum probate fees in California?

We live in California where maximum probate fees are based on the size of the estate. We have a $500,000 house and $400,000 in a bank. Both, however, are owned Joint Tenancy. Does this mean they are NOT included in determining the size of our estate for the purpose of calculating maximum probate fees?

Dana Point, CA -

Attorney Answers (4)

Janet Lee Brewer

Janet Lee Brewer

Probate Attorney - Palo Alto, CA
Answered

That is correct, as far as it goes. The problem is: what happens when the second person dies? If the house and the bank account are not held in a trust, then when the second owner dies, $900,000 is subject to probate.

And before you ask - it's usually a very bad idea to add a non-spouse (or non-domestic partner) as a joint tenant ... if that other person has any debtor/creditor problems, for example, then the creditor can seize the account or in some cases even force the sale of the house. Plus, adding someone's name to the deed or adding their name to a bank account is a gift for federal gift tax purposes - and that can be costly, too.

Why not just create a trust and not have to worry about all of those issues? Besides saving money in the long run, a trust also provides a way to handle the property if you become incapacitated (the person or bank you've named as successor trustee can step in and start managing your assets for you without having to have someone appointed as your "conservator".

I suggest you talk to a competent estate planning lawyer about your options.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an... more
Thomas Edward Rossmeissl

Thomas Edward Rossmeissl

Probate Attorney - San Jose, CA
Answered

The probate fees in California will be based upon the gross value of all assets that do not pass automatically by contract or by operation of law. So, anything held within a revocable living trust avoids probate. Retirement plans and life insurance policies (as long as there is a valid beneficiary designation) avoid probate. Assets held in joint tenancy or community property with right of survivorship avoid probate, passing automatically to the survivor. And, accounts held in joint name, or with pay-on-death instructions avoid probate. Otherwise, the fees paid to the executor and to the attorney for the executor administering the probate estate are based upon the gross (not net) value of the probate assets, and in the case of a $1 million gross estate, both the executor and attorney will be each be entitled to $23,000.

The best way for a married couple to avoid probate after the first death (and after then second death), and also have a contingency plan in place to avoid court-supervised conservatorships in the event of incapacity, is to have an integrated estate plan prepared, including a revocable living trust, one that provides for how the assets are to be used for the couple's benefit will alive (even if incapacitated), what is to happen after the first death, and what is to happen after the surviving spouse's death. All without probate or court supervision.

You should consult with an experienced trusts and estates attorney near you.

This general response is not intended to create an attorney-client relationship.
Steven J. Fromm

Steven J. Fromm

Probate Attorney - Philadelphia, PA
Answered

Ms Brewer offers sound advice. Do not do your own estate planning without experienced counsel. If Ms. Brewer is near you, then give her a call. Estate planning is very technical especially in community property states like CA. For more on these and other issues, see Estate Planning Mistakes: 5 Not So Easy Pieces at http://www.sjfpc.com/estate_planning_drafting_w...


Hope this helps.

Please remember to designate a best answer to your question.

Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website for more tax, estate and business articles is www.sjfpc.com. and his blog is

LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia... more
Answered

I agree with the attorneys above. Owning property as joint tenants may help you avoid probate upon the passing of one owner but when the second owner passes, the full property will need to pass through probate. Ultimately, once the the surviving joint tenant passes, the assets in his estate will be subject to probate.

As a probate and estate planning attorney in Irvine, I have seen simple estates go through probate because of ineffective planning and it's just not worth it timewise. The minimum amount of time it would take to finalize a probate is 6 months, often taking much longer. There are also a lot of fees incurred.

For a probate estate valued at $900,000, the maximum probate attorney's fees alone is $14,000. In addition to that, the estate will have to cover fees for the inventory and appraisal of the assets, any required bonds and court filing fees. The cost of creating an effective estate plan with a professional is within the range of court filing fees alone. Also important to note is that in valuing the probate estate, debts are not considered. For example, if your home is worth $500,000 and you still have a $200,000 mortgage, the home will still be valued at $500,000. That is why financially, it is a good idea to effectively avoid probate and meet with an experienced attorney to create an effective estate plan.

In addition to the financial aspects of an estate plan, a thorough estate plan will also account for your future medical needs as well.

I concur with the sound advice of all three attorneys above, Ms. Brewer, Mr. Rossmeissl and Mr. Fromm. Meet with a professional to ensure your needs and objectives are met.

This answer is provided solely for informational purposes only. Any opinions stated in response to Avvo questions... more

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