Probate Fees

For probate, the attorney and executor fees are set by statute. Prob C §§ 10800, 10810. At probate's conclusion, the Superior Court will award compensation as follows:

Four percent of the first $100,000 of the estate,

Three percent of the next $100,000,

Two percent of the next $800,000,

One percent of the next $9,000,000, and

One-half percent of the next $15,000,000.

For estates larger than $25,000,000, the court will determine the fee for the amount that is greater than $25,000,000.

For example a $400,000 estate would cost $22,000 in fees ($11,000 each for the attorney and executor). Additional costs include appraisal, publication and filing fees that typically amount to $1,000 to $3,000.

Furthermore, the fees for both the attorney and executor may go higher for extraordinary services such as selling a house, defending a will contest, or litigating a matter. Prob C § 10811.

What is particularly important about the probate value calculation is that encumbrances, such as a mortgage, are not included in the probate calculation. Prob C § 10810(b). Thus, if the decedent (the dead person) had a house worth $500,000 on the date of death but had a mortgage of $300,000 on the property, the probate estate would be valued at $500,000 not $200,000. This is a significant difference because the attorney fee for $500,000 is $13,000 while the attorney fee for $200,000 is $7,000.

Trustee Duties

The following is an overview of the fiduciary duties of a trustee of a trust.

1. Duty to administer trust (Prob C §16000)

The trustee has a duty to follow the terms of the trust and the law governing the administration of trusts.

2. Duty of loyalty (Prob C §16002)

The trustee has a duty to administer the trust exclusively for the benefit of trust beneficiaries.

3. Duty of impartiality (Prob C §16003)

The trustee has a duty to not favor the interests of one beneficiary over another, except if the trust provides otherwise.

4. Duty to avoid conflict of interest (Prob C §16004)

The trustee has a duty to avoid transactions that benefit the trustee personally.

5. Duty not to require beneficiary to relieve trustee of liability (Prob C §16004.5)

The trustee cannot require a beneficiary to waive their rights as a condition of distribution.

6. Duty to not undertake adverse trust (Prob C §16005)

The trustee may not act as trustee of any other trust that has a competing interest with this trust.

7. Duty to take control of and preserve trust property (Prob C §16006)

The trustee must gather trust assets and take reasonable steps to preserve them.

8. Duty to make trust property productive (Prob C §16007)

The trustee has a duty, subject to certain qualifications, to make the trust assets profitable.

9. Duty to keep trust property separate and identified (Prob C §16009)

The trustee has a duty to keep the assets and debts of the trust separate from the trustee own. In other words, the trustee should not commingle funds.

10. Duty to enforce claims (Prob C §16010)

The trustee must take reasonable actions to pursue assets that may be owed to the trust.

11. Duty to defend actions (Prob C §16011)

The trustee has the duty to take actions to prevent a loss to the trust, such as by defending a lawsuit.

12. Duty not to delegate (Prob C §16012)

Subject to certain exceptions, the trustee must perform actions on behalf of the trust rather than having others act on behalf of the trust.

13. Co-trustee Duties (Prob C §16013)

If the trustee serves along with a co-trustee, then each trustee has a duty to participate in the administration and prevent the other from committing a breach of the trust.

14. Duty to use special skills (Prob C §16014)

In managing the trust property, the trustee must use at least ordinary business ability. However, if the trustee has special skills, the trustee will be held to a higher standard of care.

15. Duty to provide information to beneficiaries (Prob C §§16060-16064)

The trustee has a number of duties related to providing financial and other information to beneficiaries.

16. Discretionary powers to be used reasonably (Prob C §§16080-16081)

Even if the trust provides that a particular action is entirely within the trustee's discretion, the trustee has a duty to act reasonably in exercising that discretion.

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If the trustee then breaches of these aforementioned duties, they are subject to removal.

Nonprobate Transfers

Certain types of property are not governed by a will. This is particularly important because many people mistakenly believe that property mentioned in a will automatically goes to the named beneficiary in the will. However, this is not the case in the following instances because on death, the property will pass outside of the will and thus probate regardless of what the will dictates.

1. Property held in joint tenancy

Joint tenancy is a form of co-ownership in which two or more persons own property in equal undivided interests. CC §683. For example, a deed which indicates joint tenancy would state, hypothetically, “John Smith and Mary Smith as joint tenants, with right of survivorship." Consequently, a deceased joint tenant's interest vests in the surviving joint tenant or tenants at the moment of death without requiring probate administration. CC §683.2(c). Thus, upon John Smith’s death, his interest would vest with Mary Smith regardless of what John Smith’s will states. 

2. Property held as community property with right of survivorship

This is another method of holding a house jointly between spouses or partners. CC 682.1. The rules that govern joint tenancy also govern community property with right of survivorship. Thus, either method of titling your house would produce the same result in terms of falling outside the scope of a will, namely the survivor would receive the other share of the house.

3. Payable on death bank account (POD)

A POD bank account is an account in which the holder designates a beneficiary as the recipient of the holder’s account upon the holder’s death. Prob C §5140. For example, if John Smith had a bank account and designated his wife as the POD beneficiary, it would typically goes as follows “this account or certificate is owned by John Smith. On the death of John Smith, ownership passes to the named pay-on-death payee, Mary Smith.” Prob C §5203(a)(2) Upon a showing of the holder’s death certificate, the bank will issue a check to the named beneficiary.

4. Totten trusts

A Totten trust bank account is an account in the name of one or more parties as trustee for one or more beneficiaries. Prob C §80. For example, a bank account titled “John Smith, Trustee for Mary Smith” is usually sufficient to create a Totten trust account. The assets in the account belong to the beneficiary, Mary Smith, on the death of the trustee John Smith. Prob C §5302(c). Once again, upon a showing of the trustor’s death certificate, the bank will issue a check to the named trustee. The name Totten trust gets its name from the case in which it was created, In Re Totten, 179 NY 112 (1904).

5. Joint tenancy bank account

Similar to a house held in joint tenancy, in that sums remaining on deposit in a joint account at the death of a joint account holder, belong to the surviving holder and not the estate unless there is clear and convincing evidence of a different intent. Prob C §5600. For example, if the bank account was held as “John Smith and Mary Smith” and John Smith dies, Mary Smith would be recipient of the remaining amount in the account upon a showing of John Smith’s death certificate.

6. Transfer on death securities

Akin to POD bank accounts, a stockholder may designate a beneficiary as the recipient of the stockholder’s stock upon the death of the stockholder. Prob C §§5501-5512. For example, if John Smith held General Electric stock and wanted to transfer it on death to Mary Smith, it would read “John Smith, owner of 1,000 shares of General Electric common stock, transfer on death to Mary Smith.” Prob C §5505. Again, the death certificate would need to be provided before a transfer is made.

7. Life insurance

The named beneficiary of a life insurance policy is entitled to the proceeds of such policy by virtue of the beneficiary designation on the life insurance policy and not by virtue of the decedent's will. Prob C §5000(a). For example, if Mary Smith took out a life insurance policy on John Smith’s life, she would receive the proceeds of such upon John Smith’s death, provided she showed the life insurance company John Smith’s death certificate.

8. Revocable trusts

Property titled in the name of the trustee of the drafter's revocable trust is not subject to probate provided the trust property is left to a beneficiary other than the trust's drafter. Prob C §13050(a)(1). For example, John and Mary Smith create the Smith 2009 Revocable Trust and transfer their home into the trust. The surviving spouse inherits everything and the Smith's close friend Peter is the remainder beneficiary. Upon the surviving spouse's death, Peter would inherit the property free of probate administration but not trust administration.

California Anti-Lapse Statute

It is not uncommon for the person entitled to something in a will, the beneficiary, to die before the person who wrote the will, the testator. In such case, the gift lapses or fails. A beneficiary needs to survive the testator in order to take the bequest. Prob C § 21109. 

However, if the beneficiary is related by blood to the testator or the testator's spouse (surviving, predeceased, or former), the descendants of the deceased beneficiary take the gift in his or her place, unless the will provides for an alternate disposition. Prob C §21110. This is known as California’s Anti-Lapse Statute. 

Yet if the deceased beneficiary is not related by blood or does not have living descendants, and no alternate disposition is provided in the will, the gift lapses and becomes a part of the residue of the estate. Prob C §21111(a)(2).

For example, suppose Tom wrote a will leaving his favorite car to his beloved brother Bob and everything else, the residue of his estate, to his friend Richard. Bob then dies before the Tom passes away and thereby the gift to Bob would lapse because Bob did not survive Tom. Yet because of California's Anti-Lapse statute, Bob’s gift of the car would pass to his children if he had any. Prob C §21110. Although if Bob did not have any children the gift of the car would pass to Richard because he is the residual beneficiary and Tom did not specifically provide for a contrary intention or a substitute disposition in case Bob died before him. Prob C §2110.

Advance Health Care Directive (living will)

The name Terri Schiavo invokes a visceral reaction for many Americans. In 1990, Terri Schiavo, then 26 years old, suffered a cardiac arrest that deprived her brain of oxygen for 5 minutes before being resuscitated. The consequential brain damage left Terri in a persistent vegetative state ("PVS"), unable to move, communicate, swallow, feed herself, make choices, think, or feel pain or emotion. She failed to regain consciousness for the rest of her life. Experimental surgery and several years of therapy produced no recovery signs.

During Schiavo's unconsciousness, her fate was the source of seemingly endless, contentious, lengthy and expensive litigation, pitting Terri' husband against Terri's family. Ultimately Terri' husband prevailed, after 7 years of litigation, and Terri's feeding tube was removed by court order for the third and final time on March 18, 2005, and she died on March 31, 2005. An autopsy revealed that no treatment could have reversed the brain damage. Goodnough, Schiavo Autopsy Says Brain, Withered, Was Untreatable, New York Times, June 15, 2005, p A1, col 1.

A California version of Terri Schiavo involved Robert Wendland. Conservatorship of Wendland (2001) 26 C4th 519. In 1993, Robert Wendland, 42 was seriously injured in an automobile accident. Emerging from a coma, paralyzed and brain-damaged, he lived on a feeding tube for 2 years before his wife of 15 years, Rose Wendland, requested permission from California courts to be named his conservator (think parent) and to remove his feeding tube. Robert's physicians indicated that he would likely never recover significantly and that he failed to interact with his environment or attempt to communicate with his family and caregivers. Rose Wendland testified that he had told her before the accident that he would never want to live in a state in which he was completely dependent on others for his care. Before involving the courts, Rose Wendland had submitted the case to the ethics committee of Lodi Memorial Hospital West. This ethics committee voted unanimously that Robert Wendland should be allowed to die.

However, Wendland's mother and sister objected to Rose Wendland's petition and argued that Wendland should be kept alive. Ultimately, the California Supreme Court ruled that the conservator, Rose, needed to show clear and convincing evidence in order to remove the feeding tube, which she could not do. Although, Robert died while the case under submission.

Finally, the most famous end-of-life United States Supreme Court case, Cruzan v Missouri Dep't of Health (1990) 497 US 261, involved a then 25 year old automobile accident victim. The resulting injury left Nancy Cruzan in a PVS as well. The accident occurred on January 11, 1983. The Supreme Court case was not decided until June 25, 1990. Later on, Cruzan's feeding tubes were removed on December 15, 1990 and died 11 days later.

These cases illustrate that end of life decision are not exclusive to the mature community and can drag on for years if not properly anticipated. In response, Californians typically draft an Advance Health Care Directive to prepare for such a situation. The document can spell out what end of life procedures the drafter wants done, (i.e. pull the plug) and can also nominate an agent to make health care decisions on the drafter's behalf should the drafter become incapacitated like Terri Schiavo or Nancy Cruzan. It is a painful but necessary decision to draft an Advance Health Care Directive (known as a living will in some jurisdictions) because the consequences of not drafting are very steep. Furthermore, it is very straight-forward to draft one. Most, if not all people, want to die with some dignity, and an Advance Health Care Directive is the optimum instrument to effectuate that sentiment.