Rental and housing prices in Silicon Valley have skyrocketed in recent years. Those who can afford it often buy a home for personal use or acquire properties for investment, in California or elsewhere. The saying “more property, more worry” is not just a metaphor when it comes to U.S.-based assets. Previously, we discussed federal estate tax implications; here we focus on the payments and procedures that apply to a decedent’s estate when no trust is created.
If a person leaves only a will—or no will at all—upon death, the estate becomes subject to probate. Probate is a court-supervised process in which assets are distributed to heirs and debts are paid to creditors. Probate is often expensive and can take several months or even years. Payments typically include attorney fees and executor fees. In most cases, this process does not apply to married couples who own property jointly. Probate will apply, for example, when one spouse leaves separate property or if both spouses pass away and leave estates exceeding certain thresholds.
If the estate includes real property, the payment applies to the full value of the property—not just the portion already paid or the net equity. For example, if a house is valued at $1,000,000, $23,000 will be paid to the attorney and $23,000 to the executor, totaling $46,000. This amount does not include payments for more complex actions. Probate fees generally apply to real estate, bank accounts, stocks, and any other asset without designated beneficiaries. Retirement accounts and life insurance policies usually have named beneficiaries and are therefore not subject to probate.
Many are unaware of this process because it does not exist in other countries. Drafting trusts is not popular abroad because there is no probate and no federal estate tax in many places. Even writing wills is uncommon, since guardianship processes for minor children are generally simpler compared to California.
To avoid probate, couples are advised to create a trust. A trust is a legal document where the creators are both the managers of the assets and the beneficiaries while they are alive and competent. If something happens to both of them, another estate administrator ensures the estate is distributed according to the instructions in the trust. To fully avoid probate, it is not enough to create the trust; assets and bank accounts must also be transferred into the trust’s name. Usually, attorneys will transfer ownership of real estate to the trust, while clients transfer bank accounts and stocks. For clients with minor children, it is also important to change the beneficiary designation from the children to the trust. The first beneficiary remains the spouse if applicable, but minor children cannot legally access retirement or life insurance accounts. Transferring the beneficiary designation to the trust ensures the court does not intervene.
The 2025 change: A separate, streamlined process was created for a decedent's primary residence if it is valued at $750,000 or less, which allows heirs to avoid a full probate case. Personal property: The threshold for personal property triggering probate was increased for 2025 from $184,500 to $208,850.
In summary, protecting your estate and avoiding probate is extremely important. Drafting a trust prevents an expensive and lengthy probate process and ensures that your estate is distributed according to your wishes. It is still important to prepare powers of attorney for assets not included in the trust, such as retirement accounts and life insurance.
The author is Einat Arbel, an attorney practicing in the areas of estate planning, nomination of guardians, wills, and inheritance planning for international clients.
This information is provided for educational purposes only and does not constitute legal advice. For guidance regarding your specific situation, consult a qualified attorney. Reading this summary does not create an attorney–client relationship with the author or her firm.