Ades: Hi, welcome back to primetime, I’m Brian Ades and today we’re continuing our conversation with Scott Schomer the founder of the Schomer Law group who focuses on estates, probates, and conservatorships.
Let’s say I unfortunately pass away before the time I’d like to. What is probate?
Schomer: Excellent question, probate is an orderly court process where we wind down the affairs of a deceased person called the decedent. If you don’t have an estate plan, or all you have is a will you will most likely find yourself or your heirs will find your estate in probate court, having your assets subject to probate. It’s the government’s plan of last resort. The reason you want to avoid probate Brian, is there are a number of problems, but the two big ones are cost and delay. On average in Los Angeles County it takes a minimum of 9 months if not closer to a year and a half to process an estate through the probate process. This presents challenges if you have minor children, if you have a dependent spouse or other people that are depending on you for financial support. That’s one challenge. The other challenge is financial one. On average the cost of processing your assets through a probate administration process is about 4-8% of the gross value of the assets.
Ades: That’s a lot! So let’s say I have a loved one who has passed away and they didn’t have a will or a trust or a conservatorship? What happens physically to the property? Who’s in control of it, is the family responsible for the debt? Tell us a bit about financially what happens to the asset.
Schomer: I like to think of probate as a three step process. First, somebody petitions to put an individual in charge. If there’s a will that person who’s going to be put in charge is called executor. If there’s no will that person is going to be called the administrator. They’re the same person but essentially the court empowers them to exercise all the rights of the owner. Once the administrator/executor is in charge they typically take at least about four months to deal with, process the estate, pay the bills, deal with the creditors’ claims, those types of things. Then after that 4 month period the administrator or executor can then petitions to close and distribute the estate. So who’s in charge? Well the administrator or executor would be the person in charge but one of the challenges you face is that it typically takes about 4-6 weeks before you can get an administrator appointed unless there’s some sort of emergency. So all the bill, all the debts, all the interests continue to accumulate somebody has to address them and the court system is just sort of a slow method to do it. This is one of the reasons you want to put a good plan into place is if your assets are sitting in a trust as opposed to no planning than the person who is the trustee can take over and go to work immediately.
Ades: Got it thank you Scott, I really appreciate your time today, it’s great talking to you.
Schomer: My pleasure Brian, thank you.