Calculating Estate Value for the Petition

Emily just received notice her mother passed away, and while the estate seems small, Emily discovered a previously unknown investment account containing $80,000. Now, she’s facing potential probate delays and legal exposure because she initially underestimated the estate’s value – a mistake that could cost her thousands in legal fees and penalties.

As an estate planning attorney and CPA with over 35 years of experience here in Escondido, I frequently encounter this scenario. Clients underestimate the complexity of determining estate value, leading to costly errors and unnecessary complications. It’s not just about bank accounts and real estate; a comprehensive calculation requires understanding various asset types, valuation rules, and potential tax implications. My CPA background gives me a unique advantage in accurately determining “step-up in basis” for inherited assets, minimizing capital gains taxes for your beneficiaries, and maximizing the overall estate value passed on.

What Assets Need to be Included in the Gross Estate?

Calculating the gross estate isn’t as straightforward as totaling up bank statements. You must consider all assets owned by the decedent at the time of death, regardless of whether those assets are subject to probate. This includes real property (houses, land), personal property (vehicles, jewelry, art), bank accounts, investment accounts (stocks, bonds, mutual funds), life insurance proceeds (payable to the estate), retirement accounts (IRAs, 401(k)s), and business interests. Don’t forget digital assets like cryptocurrency or valuable domain names. Even unpaid income earned up to the date of death must be included.

How Do You Value Different Types of Assets?

The valuation method depends on the asset type. Cash and readily marketable securities (stocks traded on an exchange) are typically valued at their closing price on the date of death. Real estate requires a professional appraisal, particularly if it’s not a simple residential property. Personal property can be valued based on fair market value, which is what a willing buyer would pay a willing seller. For illiquid assets like closely held stock or business interests, a qualified business appraiser is essential. Failing to accurately value these assets can trigger scrutiny from the court or beneficiaries.

What About Jointly Owned Property and Community Property?

This is where things get complex. In California, community property owned equally by a married couple passes directly to the surviving spouse and is not included in the gross estate for probate purposes. However, separate property owned solely by the decedent is included. Jointly owned property with rights of survivorship also passes directly to the surviving owner and is excluded from the probate estate. However, the value of that property still needs to be listed on the petition, even though it won’t be probated. Accurate categorization is crucial.

What is The Probate Threshold? Why File?

…filing a Petition for Probate (Form DE-111) is mandatory if the decedent’s gross estate value exceeds $208,850 (effective April 1, 2025). Below this amount, successors should use the Section 13100 Small Estate Affidavit or AB 2016 Petition for Succession instead. Often, clients err on the side of caution and file probate even when it’s not required. While avoiding potential errors is understandable, probate can be costly and time-consuming. A proper valuation helps determine the most efficient path.

What Happens if I Underestimate the Estate Value?

Underestimating the estate value can have serious consequences. If the estate is later found to exceed the probate threshold, you may be required to amend the petition and initiate formal probate proceedings, incurring additional legal fees and court costs. Furthermore, if the undervaluation is intentional or due to gross negligence, you could face penalties or even personal liability. It’s far better to be accurate upfront than to risk legal repercussions later.

What causes California probate cases to spiral into delay, disputes, and extra cost?

California probate is designed to provide court-supervised transfer of property, yet cases often break down when authority is unclear, required steps are missed, or disputes arise over assets, notice, and fiduciary conduct. When the process is misunderstood, families can face avoidable delay, escalating conflict, and increased exposure to creditor issues, hearings, or litigation before the estate can close.

California probate is most manageable when authority is documented early, assets are classified correctly, and procedure is followed consistently from petition through closing. When the process is approached with realistic expectations about notice, claims, accounting, and dispute risk, the estate is more likely to move toward closure without avoidable conflict or delay.

Verified Authority on the Petition for Probate

• The Petition (Form DE-111): California Probate Code § 8000 (Grounds for Filing)
  This is the document that starts it all. Under Section 8000, any interested person may file this petition to request the court admit a will to probate and appoint a personal representative. Without this filing, the court has no jurisdiction to act.
• Duty to File the Will: California Probate Code § 8200 (Custodian Duty)
  Holding onto the original Will is a liability. The law requires the custodian to deliver the Will to the Superior Court Clerk within 30 days of the death. Hiding or destroying a Will to prevent probate is a serious legal violation.
• Priority for Appointment: California Probate Code § 8461 (Intestacy Hierarchy)
  When there is no Will, the court does not choose the “best” person; it follows a rigid statutory list. The Surviving Spouse has top priority, followed by children, then grandchildren. Understanding this hierarchy helps predict who will win a contested appointment.
• Probate Bond Requirements: California Probate Code § 8482 (Bond Amount)
  The bond acts as an insurance policy to protect beneficiaries from a dishonest executor. The petition must state the estimated value of the estate so the judge can set the bond amount—typically the value of personal property plus one year’s estimated income.
• Independent Administration (IAEA): California Probate Code § 10400
  The box you check here matters. Requesting “Full Authority” under the IAEA allows the executor to manage the estate efficiently (e.g., selling a house) without constant court hearings. Requesting “Limited Authority” forces the estate into a slower, court-supervised process.
• Proving a Lost Will: California Probate Code § 8223
  If the original Will cannot be found, the law presumes the decedent destroyed it with the intent to revoke it. To overcome this presumption, the petitioner must provide clear and convincing evidence that the Will was merely lost, not revoked.