Let’s say a couple have a great idea and rather than spending money on an estate plan, they decide to hold title to their home as Husband and Wife as Joint Tenants or Husband and Wife as Community Property with Right of Survivorship.
Either way, the fifty percent interest in the home of the first to die immediately is vested in the survivor. The survivor now owns the home outright. No probate, no lawyers, no problem, right?
Everything is great except for one small problem. What happens when the survivor later passes away?
You guessed it-Probate! The survivor is on title to the property but title cannot pass because the only person who can pass title to a buyer is dead! The irony here is that a properly drafted estate plan would have avoided probate and would have cost a lot less than the fees a probate attorney is probably going to collect.
For example, let’s say the home was worth $1,000,000.00 at the time of the second to die. For simplicities sake, let’s say there is nothing else in the probate estate. Attorneys’ fees are probably going to be in the neighborhood of $23,000. (Probate Code section 10810) This is based on the GROSS value of the probate estate. This does not take into consideration of what the Administrator of the probate proceeding would be entitled to as far as fees.
A living trust would have probably run about 10%, give or take, of what your estate is going to pay an attorney to probate the estate.
