Estate Planning & Management in the San Francisco Bay Area

In California, if a person dies with or without a Will, the decedent's estate will be subject to “Probate,” the process directed by State testamentary laws. An estate in Probate Court proceedings will be subject to a long and complicated process which takes on average one to two years to complete, makes all the details of the estate subject to public record, may be distributed to persons never as intended by the decedent and will likely cost the estate over $50,000.00 to complete. However, if one establishes and appropriately maintains a Living Trust, the estate will not be subject to Probate proceedings. A competent and complete estate plan provided by Von Rock Law includes, at a minimum: a Living Trust, Will, Durable Power of Attorney and Advanced Health Care Directive.

1. Probate Fees Paid to Attorneys and Executors.

California law sets forth in Probate Code Section 10810 the amounts that the Attorney may be paid for a probate proceeding. This “statutory fee” is also payable to the “Executor” or “Personal Representative” appointed by the Court to represent the Estate. The fee is based upon the value of the Estate and is not set off by liabilities, i.e., if a decedent owns a home valued at $1,000,000 that is mortgaged at $900,000, the “value” of the Estate for probate valuation purposes is still the full $1,000,000 value of the home plus all of the decedent's other assets.
The statutory fee is computed as follows:

First $100,000: 4.0% ($4,000) Next $100,000: 3.0% ($3,000) Next $800,000: 2.0% ($16,000) Next $9 Million: 1.0% (up to $90,000) Next $15 Million: 0.5% (up to $75,000) Above $25 Million: Reasonable amount to be determined by the Court

Accordingly, on a $1,000,000 Estate, the Attorney and the Executor would each be entitled to a fee of $23,000. Related costs such as filing fees, court ordered appraisals, various certifications, deed recordings and tax preparation fees are likely to exceed $4,000, resulting in an average $50,000 probate bill for a $1,000,000 Estate.

Some Executors, particularly those who are family members, may waive their right to take a statutory fee and thereby reduce the overall probate bill. However, contrarily, total Attorney's fees and Executor's fees can be higher than the statutory maximum if the Court also orders payment of an “extraordinary fee,” that is, additional fees awarded for work such as completing federal estate tax returns, engaging in estate litigation and for handling very complicated or time-consuming problems of an Estate.

2. Distribution of Your Assets.

If you have a Will in place which directs the disposition of your assets, the Probate Court will honor the wishes set forth therein given there are not applicable contests of the Will. However, absent a Will, your estate will be disposed of per the terms of the Probate Code. In the situation of a married couple with children, the estate is distributed among the surviving spouse and children. Families with more than one child will have an award of 1/3 of decedent's estate to the spouse and the remainder to the children. This is an unlikely intention of most families.

3. Care of Children.

If you do not have a Will in place which directs the placement of your minor children in the event of your death, such decisions may be left to the courts and family members with different intentions than the deceased parents. Further, children with no immediate identifiable guardian may be subject to State care for at least a temporary period.

4. Health Care and Legal Matters Upon Incapacity.

Additional documents created with a Living Trust Plan include a Durable Power of Attorney and Advanced Health Care Directive, both of which are triggered upon an individual's incapacity and allow an agent to care for the person per his or her intentions. Such documents provide certainty and continuity during critical health crises and help to assure that a person's end of life wishes are honored.

5. Additional Trusts.

Individuals who wish to plan lifetime gifting for children or charities, who have substantial life insurance and who may be subject to estate tax (currently, a 40% tax on assets over $22,400,000 for a married couple or $11,200,000 for an individual, a number that may include insurance proceeds that flow to a spouse) should also discuss with their estate or tax planner the possibility of setting up additional trusts to reduce or avoid estate tax consequences.

At Von Rock Law, we use many of the most modern and efficient means possible to make the estate planning process as expedient as possible. At the same time, we work closely with our clients to ensure that their individual intentions are well considered, informed and honored.

Legal and Business Affairs Management

We further offer customized solutions to managing the legal and business affairs of affluent individuals and families. Retainer based services are tailored to meet the needs of busy clients who desire to engage with one direct point of contact to collaborate with his or her other business professionals, including, but not limited to, accountants, bankers, financial advisors and insurers. A monthly fee scaled to individual client needs entitles an individual to a single point of access that promotes consistency and efficiency in the management of personal affairs. This practice is also a valued tool in the administration of Trust Estates.