The legal system is in control not of your assets when you die NOT your spouse or family.
In California, if you have any assets (real property/home or financial accounts or a business) and the asset is not designated to a beneficiary or titled under a Living Trust, the legal system takes control over the assets at the time of your death and distributes it to your legal heirs under law.
Waste of time and money.
In California, Probate Court takes almost 2 years to complete and the minimum cost to open a Probate Case is $3,000. CA has the worst and most strict Probate laws in the entire United States. If you have any money or assets that total over $166,200 and no Living Trust (even with a Will) your assets will be required to go through the Probate Court system which is open to the public and any potential creditors to make a claim against your estate.
What is worse is that it can lead to family members fighting who should be in charge of your assets or get your assets and the legal fees for Probate is based on the “Market Value” of your assets.
SO, if you own a home that is valued at $1M (but owe the bank $800,000 still), the Probate Fees are set by the Court and will be based on $1M. In this example the minimum cost to Probate just the home/property will be $35,000! :o Even a property worth $400K, it can cost $6-9,000 to go through probate and it will take at least 6 months before your family has access to the assets and almost 2 years before the assets can be given to the family members.
Here are some other negative aspects of California Probate:
- A Judge decides who in your family should be in charge.
- The entire probate case and information (including your asset info) is all public.
- Anyone with a claim against you can file a creditors claim - valid creditors have first priority.
- The court can require the person in charge to pay a Bond to make sure the assets are safe.
- Kids under 18 that are potential heirs of the assets do not get the funds until they are 18.
- If a child is 18, they get the assets and there is no way to protect the assets for them.
- There are several filing fees and costs related to the handling of a California Probate case.
- Family members can fight over who gets the assets or make claims against the estate.
- The estate can incur late fees and penalty payments from having to wait for probate to end.
- Family members relying on the money have to find another source until the case ends.
- The process of probate is detailed and you have to provide the court a lot of information.
- The family member that becomes the court appointed agent say it is a lot of work & stress.
- You have to wait in line like everyone else when you have a probate no matter your urgency.
- Passing assets to heirs under probate provides them with no creditor protection.
- When assets are passed under probate to an heir it can affect their government benefits.
- The family has no immediate way to pay for funeral expenses for the loved one that died.
- Family members do not have access to funds and cannot pay rent or mortgage payments.
- To open a probate, the family member has to pay out of their own pocket the initial fees.