Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

October 9, 2012
Will a probate be required for this estate?

Q: We have started to look after my husband's elderly aunt, who is not a family favorite. She is not in the best of health and has no children or husband. She has a handwritten will and has given her sister (my husband's mother) 50 percent and us the other 50 percent (probably due to the fact that we've been helping her).

We didn't really think too much about it because we suspected there really wasn't much money involved - probably just enough to pay her bills. But we've learned recently that the amount is more like $150,000 with at least half in a CD and the rest in stock funds. There is no real estate.

The will does not name someone to execute the will. We plan on dividing our half with my husband's brothers and sisters who can use the money, no matter how small.
Will there be probate required or can we handle this ourselves? -- Kris, Folsom, CA

A: In California, no probate is required for estates with property valued at $150,000 or less, not including assets held in trust or joint tenancy, certain vehicles or assets that pass by beneficiary designation (such as payable-on-death or transfer-on-death accounts). If your husband's aunt's estate is valued at over $150,000 (after you ignore the assets that don't have to be counted toward the minimum), a probate will be required, even if she has a valid will.

If your aunt still has the capacity to make decisions about her estate planning, she could change her CD and/or stock fund to a payable-on-death or transfer-on-death account and name a beneficiary, which would remove the accounts from the calculation of the $150,000 minimum.

If your aunt's will does not name an executor, the Probate Code sets forth the people who have priority to serve as personal representative of her estate. Your mother-in-law would likely have priority over you and your husband, unless she declined to serve.

If your aunt does have legal capacity to make changes to her estate plan, she could also set up a simple trust that would avoid probate, if her estate would otherwise be probated. She may want to update her will and name executors. Holographic wills have more problems associated with them than wills prepared by an attorney, so meeting with an attorney would be advisable.

If you do inherit half of your aunt's estate and decide to give part of it to your siblings, keep your gifts to any one person within the annual gift tax exclusion amount ($13,000 in 2012). If you give more than that to one person, there would be gift tax consequences to giving away part of your inheritance.

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Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at cbuck@sacbee.com

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.



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