HIGH NET WORTH ESTATES

There is no single answer.

Some assets can transfer outside probate because of how they are owned or because they have designated beneficiaries. These may include retirement accounts, life insurance, certain jointly owned assets and other property with valid beneficiary arrangements.

California also provides simplified transfer procedures for certain smaller estates and property, but the applicable limits are far below a typical $5 million estate. For deaths on or after April 1, 2025, for example, the general small-estate personal-property limit is $208,850, while a separate procedure can apply to a qualifying California primary residence valued up to $750,000.

(California Courts)

Assets properly held in a Living Trust generally can also pass outside formal probate. California Courts specifically identifies property in a Living Trust among the types of property that can transfer without formal probate. (California Courts)

But substantial assets owned individually without another probate-avoidance mechanism may require formal probate administration.

This is where advance planning can make an enormous financial difference.

California law establishes statutory compensation for the attorney representing the personal representative in a probate proceeding.

For ordinary services, Probate Code §10810 provides:

Statutory Attorney Compensation: $63,000

California uses the same percentage schedule to calculate statutory compensation for the personal representative’s ordinary services.

That means a $5 million probate estate can potentially involve:

Portion of Estate	Rate	Attorney Compensation
First $100,000	4%	$4,000
Next $100,000	3%	$3,000
Next $800,000	2%	$16,000
Next $4,000,000	1%	$40,000
$5 Million Estate		$63,000

Statutory Attorney Compensation: $63,000

California uses the same percentage schedule to calculate statutory compensation for the personal representative’s ordinary services.

That means a $5 million probate estate can potentially involve:

• Attorney compensation: $63,000
• Personal representative compensation: $63,000
• Potential Combined Statutory Compensation: $126,000

And that is before applicable court costs, appraisal expenses, publication expenses and other costs of administration.

The California Legislature’s statutory formula also contains an important provision for property subject to debt: for purposes of attorney compensation, estate value is generally determined from the appraisal and specified adjustments without reference to encumbrances or other obligations on estate property. (California Probate Code §10810)

That can be especially important for California real estate.

A $5 Million Estate Does Not Necessarily Mean $5 Million in Cash

Many California families reach multimillion-dollar estate values primarily because of real estate. Consider a homeowner who purchased a property decades ago that is now worth several million dollars. Then add:

• Retirement accounts
• Brokerage accounts
• Bank accounts
• A second property
• Business interests
• Life insurance
• Personal property

and the total estate can quickly approach or exceed $5 million.

The family may never have thought of itself as extraordinarily wealthy.

But estate planning is based on the assets you actually own and how those assets will transfer—not whether you consider yourself “wealthy.”

For Marin County families, appreciating real-estate values make this particularly relevant.

A will alone does not avoid probate.

A will can state who should receive your property, nominate an executor and provide other important instructions.

But California Courts explains that an estate can require probate even when the person had a will. (California Courts)

For someone with substantial assets, a will should generally be viewed as one component of an estate plan rather than a complete probate-avoidance strategy.

A revocable Living Trust allows you to establish a legal structure for owning and managing assets during your lifetime and administering them after your death.

You ordinarily remain in control of the trust while you are capable.

You select a successor trustee who can take over responsibility according to the trust’s terms when necessary.

Most importantly for probate planning, California Courts explains that when assets have been properly placed into a Living Trust, they should pass to the beneficiaries without having to go through probate court. (California Courts)

For a $5 million estate, that can be extremely significant.

The Trust Must Actually Be Funded

A trust sitting in a binder does not automatically protect a $5 million estate from probate.
Assets intended to be governed by the trust generally must be properly transferred into, titled in, or otherwise coordinated with the trust. That may involve:

Real Estate


Preparing and recording appropriate deeds.

Bank and Investment Accounts


Reviewing ownership and beneficiary arrangements.

Business Interests


Determining whether and how ownership interests should be coordinated with the trust.

Other valuable property


Determining the appropriate method of ownership or transfer.

California Courts specifically conditions the probate-avoidance benefit on assets having actually been put into the Living Trust. (California Courts)

For a substantial estate, funding the trust can be every bit as important as drafting it.

Estate Planning Is Also Incapacity Planning

What happens if you don’t die—but become unable to manage your affairs?

For someone responsible for a $5 million estate, this question can be critical.

Who can:

• Manage investment and bank accounts?
• Pay expenses?
• Handle real estate?
• Deal with insurance?
• Manage trust assets?
• Make healthcare decisions?
• Communicate with physicians?
• Operate or oversee business interests?

California Courts emphasizes that estate planning addresses lifetime incapacity as well as death and identifies powers of attorney and advance healthcare directives as important planning documents. (California Courts)

A comprehensive estate plan should therefore answer:

Who has authority to act if I cannot?

This is an area where current numbers matter.

For 2026, the federal basic estate-and-gift-tax exclusion is $15 million per individual.

Therefore, a $5 million estate by itself is below the current federal basic exclusion amount. (IRS)

That does not mean taxes can simply be ignored.

Estate and tax planning can depend on:

• Prior taxable gifts
• Whether the person is married
• Portability of a deceased spouse’s unused exclusion
• Income-tax basis
• Retirement assets
• Business interests
• Generation-skipping transfers
• Property ownership
• Future appreciation
• Changes in federal or state law

The IRS also notes that a federal estate-tax return can sometimes be filed to elect portability of a deceased spouse’s unused exclusion even when the estate itself is below the normal filing threshold. (IRS)

For that reason, tax considerations should be evaluated as part of substantial-estate planning rather than assuming that being below today’s federal exclusion ends the discussion.

Beneficiary Planning Becomes More Important as the Estate Grows

Estate planning is not simply about determining who gets what.
For a substantial estate, another important question is:

How should they receive it?

Leaving a significant inheritance outright may not always be the best approach. Depending on the family and objectives, a trust can establish instructions regarding how assets are managed and distributed to beneficiaries.

Questions may include:

• Should a beneficiary receive everything immediately?
• Should assets remain in trust for younger beneficiaries?
• Who should manage inherited assets?
• What happens if a beneficiary dies before you?
• What happens if family circumstances change?
• How should real estate be handled when several beneficiaries are involved?

These are highly individual decisions. A well-designed estate plan gives you an opportunity to make them deliberately rather than leaving problems for your family to resolve later.

Review How Every Major Asset Is Owned

For a $5 million estate, creating an asset inventory is an excellent starting point.

Review:

Real Estate
How is each property titled?

Bank Accounts
Individual, joint or trust ownership?

Investment Accounts
How are they titled?

Retirement Accounts
Who are the primary and contingent beneficiaries?

Life Insurance
Are beneficiary designations current?

Business Interests
What happens to ownership if you die or become incapacitated?

Existing Trusts
Are they funded and current?

Existing Wills
Do they still reflect your wishes?

Powers of Attorney and Healthcare Directives
Are the people you selected still appropriate?

Estate planning works best when these pieces are coordinated.

A $5 Million Estate Deserves Periodic Review

An estate plan created ten or fifteen years ago may no longer reflect your circumstances.
Review is particularly important after:

• Marriage
• Divorce
• Birth or adoption of children or grandchildren
• Death of a spouse, beneficiary or trustee
• Purchase or sale of significant real estate
• Major increase in property value
• Sale or creation of a business
• Significant inheritance
• Retirement
• Relocation
• Changes in tax or estate-planning laws

For California homeowners, appreciation alone can dramatically change the value of an estate without the owner acquiring any additional property.

Depending on the circumstances, a comprehensive plan may include:

Revocable Living Trust – Provides instructions for management and distribution of trust assets and can allow properly funded assets to avoid formal probate.

Will – Addresses assets and matters governed by the will and works together with the trust.

Power of Attorney – Authorizes a chosen person to handle specified financial and legal matters when appropriate.

Advance Healthcare Directive – States healthcare wishes and identifies the person authorized to make healthcare decisions when necessary.

Real Estate Transfer Documents – Properly prepared deeds can be necessary to coordinate real property ownership with the estate plan.

Beneficiary and Asset Review – Ensures that assets outside the trust are coordinated with the overall plan.

The Goal Is More Than Avoiding Probate

Avoiding unnecessary probate expense is important.

But for a $5 million estate, the larger objective is:

Control – Who controls your assets if you become incapacitated?

Continuity – Can someone step in and manage your affairs?

Distribution – Who receives your wealth, and under what circumstances?

Privacy – Can appropriate assets be administered outside a public probate proceeding?

Efficiency – Have you made administration easier for your family?

Legacy – Does the plan actually accomplish what you spent a lifetime building toward?
Those questions matter regardless of whether federal estate tax is ultimately due.

Estate Planning for a $5 Million Marin County Estate

For many Marin County residents, a $5 million estate can consist largely of a valuable home plus retirement and investment assets.

That makes sophisticated estate planning relevant to far more families than the phrase “$5 million estate” might initially suggest.

The important question is not whether you think of yourself as wealthy.

It is: If something happened to you today, do you know exactly what would happen to everything you’ve built?

If the answer is no – or if your estate plan hasn’t been reviewed recently – it may be time to take another look.