is the process of transferring the legal title of property from the estate of the person who has died (known as the “decedent”) to his or her proper beneficiaries.The term “probate” refers to a “proving” of the existence of a valid Will, or the determinating and “proving” of who the decedent’s heir are if there is no Will. The probate process is used to determine who gets the decedent’s property.
The main function of probate is to transfer title of the decedent’s property to his heirs and/or beneficiaries. If there is no property in the decedent’s estate to transfer, then there is usually no need for probate.Another primary function of probate is to provide for the collection of any taxes due by reason of the decedent’s death or on the transfer the decedent’s property.
The probate process is also a mechanism for payment of outstanding debts and taxes of the estate, for setting a deadline for creditors to file claims against the estate, and for the distribution of the remaining estate assets to the decedent’s rightful heirs.
No. Most states also allow a limited amount of several types of property to pass to certain beneficiaries without utilizing the probate process, or through a simplified probate procedure.
Where real and personal property is owned by joint tenants, that property passes to the surviving co-owners without going through probate.There are other types of benefits, such as an annuity or life insurance policy that are payable directly to a named beneficiary, and therefore bypass the probate process. Money from Keoghs, IRAs, and 401(k) accounts will transfer automatically, outside probate, to the persons named as beneficiaries. Bank accounts that are set up as payable-on-death account (POD for short) or an “in trust for” account (a “Totten Trust”) with a named beneficiary will also pass to the named beneficiary without probate. When a Living Trust holds legal title to property, that also passes to the named beneficiaries without probate.
The cost of the probate process is set by state law. California Probate Code section 10810 sets the maximum statutory fees that an attorney can charge to probate an estate. Higher fees can be ordered by the court if the case is more difficult and/or complicated. The fees are 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.
These fees are the statutory fees under the California Probate Code to compensate attorneys and executors in probate cases for various sizes of estates. If both the attorney and the executor are to receive a fee, the amount paid will be double that amount.
In addition to the statutory fees, there are costs for court filing fees, appraisal fees, publication costs, and miscellaneous fees charged by the county. A typical estate might incur $1,000 to $2,000 in court costs and other fees.
In California a probate proceeding can take a minimum of six months and as long as several years.
Even if a person dies with a Will (otherwise known as dying “testate”), the Court generally has to allow others to object to the Will, and if there are any objections, to determine if the Will is valid.
Transactions are governed by a wide body of federal statutes and state statutory and common law. The requirements established by state law often differ significantly from one state to the next.
Real estate brokers are employed as the agent of the seller in order to obtain a buyer for their property. The contract between the broker and seller is called a listing agreement. The agreement may be an open agreement where by the broker earns a commission only if he or she finds a buyer. A listing is exclusive if the broker is the only agent entitled to a commission for finding a buyer. Under an exclusive arrangement a broker may be entitled to a payment even if the seller finds the buyer without the brokers aid. Real estate brokers and salesperson are licensed and regulated by local state laws.
The Federal Fair Housing Act prohibits discrimination in real estate transactions on account of race, color, religion, sex, or national origin. Real estate brokers are specifically prohibited from discriminating by the act.
The agreement to sell between a buyer and seller of real estate is governed by the general principles of contract law. The Statute of Frauds requires that contracts for real property be in writing.
It is commonly required in real estate contracts that the title to the property sold be marketable. This requires that the seller have proof of title to all the property he or she is selling and that third parties not have undisclosed interests in the title.
A title insurance company or an attorney is often employed by the buyer to investigate whether the title is, indeed, marketable. Title insurance companies also insure the buyer against losses caused by the title being invalid
In order to pass title, a deed with a proper description of the land must be executed and delivered. Some states require that the deed be officially recorded to establish ownership of the property and/or provide notice of its transfer to subsequent purchasers.
The most common method of financing real estate transactions is through a mortgage.