If you’re the executor of an estate in California

Guidelines for executors of California estates going through probate

• Executors in California must be 18 years old and of sound mind. In-state and out-of-state executors are both allowed.

• As with other states, in California you’ll first need to petition the court for letters testamentary to be empowered to act on behalf of the estate.

• California requires an executor bond, also known as a probate bond or fiduciary bond, to ensure that executors live up to their financial responsibilities.

• Executor pay is set based on the size of the estate. For example, the executor is entitled to 4% of the first $100,000 of the estate, then 3% of the next $100,000. For higher values, the calculation continues to change.

• California allows co-executors and, like other states, has a specific process for changing or removing executors.

If you are serving as executor to an estate in California, or will be soon, the good news is that the rules related to executors are not quite as stringent as they are in other states.

But getting a full picture of what California requires is important, especially since you’ll most likely need to post an executor bond and your compensation is set by state law, based on the size of the estate.

The two most basic requirements for executors are: They must be at least 18 years of age and of sound mind. While some states will not allow a convicted felon to serve as an executor, California permits convicted felons to serve as executors.

California also allows executors to be from out of state. While this can create an issue for the executor, especially since they’ll need to be in-state, if not relatively close by, to handle the estate’s business, the fact remains that California has no laws barring out-of-state executors.

Like most states, California courts will step in if the executor has done something that is grounds for removal: either being incapable of handling the process in a timely manner or mismanaging or neglecting the estate.

If this ends up being the case, a hearing will be held, and people interested in the outcome of the process will be in attendance so the probate judge can choose a more suitable person for the job.

First step: Obtain letters testamentary

Letters testamentary, also known as a letter of testamentary, is a document issued by the probate court that gives the executor permission to take inventory of assets your loved one left behind, as well as appraise them, and eventually distribute them to the beneficiaries. Although not all states require that the executor obtain these documents, California does.

In order to get these necessary letters, you must file a petition with the Superior Court requesting them. But before you do that, file the California Probate Form DE150 in addition to the petition and any other required paperwork.

These legal documents establishes the executor’s authority to act on behalf of the estate, giving them the right to do everything that needs to be done. In fact, in California, you can’t move ahead with executor duties until the probate court gives the official OK.

However, not every estate needs these letters in California. For example, if your loved one left behind no more than $184,500, then full probate is not needed—and neither are the letters testamentary. 

In addition to that loophole, the four following types of assets don’t require letters testamentary to be transferred:

• Assets that are held in joint tenancy.

• Any assets that are in “payable on death” or “in trust for” accounts.

• Life insurance proceeds or retirement accounts that are meant to be passed on to a living beneficiary.

• Any assets that have been placed in a trust.

Posting an executor bond

Although executor bonds (also known as probate bonds or fiduciary bonds) are not mandatory in every state, California requires that executors or personal representatives of the estate get a probate bond—even if the executor is a family member.

If you then act in a way that is corrupt, misleading, damaging, or breaches your fiduciary duty, the bond is removed and you will be held responsible for not only reimbursing the bond company, but for any damages caused in the process.  

Despite this requirement in California, there are two situations in which an executor doesn’t have to obtain a probate bond:

• The last will and testament waives the requirement of the executor being bonded—although, in some scenarios, the court can override this and demand a bond anyway.

• All the beneficiaries put in writing that they waive the bond requirement and attach these waivers to the initial petition that goes to probate court where the appointment of the executor is confirmed.

If you are an out-of-state executor, however, California requires that you be bonded. No waivers can exempt you from posting an executor bond.

Understanding executor pay in California

No matter if your executorship was appointed to you by a loved one or if the original executor stepped down and you were appointed by the court, executors are entitled to compensation. 

Granted, if you’re a family member and you would rather not receive compensation, as it does come out of the estate, you have the option to refuse it. But being an executor is not an easy job, so no one can blame you if you accept fair compensation, in accordance with state law.

According to the California Probate Code section 10800, the executor receives a percentage of the estate. For example, the executor is entitled to 4% of the first $100,000 of the estate, then 3% of the next $100,000, and 2% of the next $800,000.

If the estate is in the millions of dollars, the executor will receive 1% on the next $9 million, then 1/2% on the next $15 million. For estates that are worth $25 million and above, it is up to the court to determine what is a reasonable amount for the executor.

Serving as a co-executor

Naming more than one executor can be confusing and even add unnecessary drama to an already difficult job. But for some people, as they are preparing their last will and testament, it makes sense to choose more than one representative for their estate. For example, if there is more than one living child.

There’s also the possibility that the will is updated later in life and the person who passes away wants to make sure their spouse, who may be getting on in years, has someone to help them with the process.

No matter the reason, in California a co-executor is just as responsible as the executor to adhere to the legal duty of handling one’s estate in accordance with California law.

This means that both the executor and co-executor must sign the petition for probate, both will have to sign checks, as well as other necessary paperwork, both have to file tax returns, and each executor basically has to keep an eye on the other to make sure everything is on the up and up. 

Should one executor not do their job properly or, even worse, behave in an inappropriate or deceitful way, it’s the responsibility of the other executor to report them to the probate court immediately.

Replacing an unwilling executor

While being appointed the executor of a loved one’s will is quite an honor, it is also a lot of work that some people just can’t handle.

Whether you’re too busy with your job, your family, or just simply don’t think you can do right by your loved one as executor, remember that you do not have to accept the job. 

If that’s the decision you make and you’re quite sure you won’t change your mind, you can decline the nomination, and a Sacramento probate court will appoint someone else instead.

On the other hand, if beneficiaries believe that the executor nominated in the will is incapable of fulfilling their duty, California allows them to petition for the executor’s removal. In fact, the petition can be made even before the executor gets started on their duties as a preventative measure. 

Serving as an executor for a loved one’s estate is a solemn duty, but a meaningful one—as you fulfill these responsibilities, understanding the particulars of California probate law will help you see the big picture before begin. And as you proceed, always remember that you can call on the help of a lawyer or other professionals in the state for their specific expertise.

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