Whether you have recently lost a loved one or you are working on setting up your estate plan, you may be wondering about the probate process. Is it always required in California? How can you avoid it?
These are valid questions which first require a look at the probate process and the state laws surrounding it. Each state’s process for handling probate can vary depending on the laws, however, there are many similarities to the overall steps involved. Let’s discuss how this process looks based on the California probate code, as well as reasons why and the steps you can take to avoid the probate process.
What is the Probate Process?
Probate is a legal process that takes place when an individual dies and circumstances require the probate court to determine how the estate should be administered. This means determining who the heirs and beneficiaries are, how much the assets are worth, and how the assets should be distributed to the heirs and beneficiaries.
Before any of this can be determined, it must be established whether the deceased person had a will and, if so, whether the will is legitimate and executed properly. Then the court appoints an individual who is responsible for collecting and distributing assets and handling any debts or other financial matters of the estate.
If the deceased person had a will, the appointed person is called the “executor”, and they are responsible for filing a claim with the probate court. If there is no will, the court will appoint this person who is to handle the estate. In this case, they are called the “administrator”.
The probate process is long and time-consuming and can take months or even years.
Does California State Law Require a Will to be Probated?
Probate is usually required in order to administer an estate of the deceased. Keeping this in mind, there is a simplified process under California law that can be followed in the event that the assets of the estate amount to less than $166,250. If the total falls over this specified amount, the more extensive probate process may be required.
In some cases, probate may not be required at all. If assets such as bank accounts and life insurance policies have designated beneficiaries, they will pass straight to the beneficiaries without the need for probate.
If the estate contains real estate, it may automatically transfer to the surviving spouse. Real property that is community property with right of survivorship allows the property to avoid probate.
4 Reasons to Avoid Probate
While many residents in California may accept that the probate process is a necessary part of handling an estate after someone passes, there are ways to avoid having an estate go through probate altogether. But what makes avoiding this process the better option? There are several reasons to avoid having to probate an estate.
1) The Probate Process is Costly
As previously mentioned, this is a process that takes place in the probate courts. This often makes it necessary to hire and pay for a probate attorney to assist, as well as paying an executor/administrator for their duties related to the steps of the probate process.
Also, the court has fees that must be paid throughout the process. This creates thousands of dollars in fees that could be avoided if probate was not needed.
2) The Probate Process Creates Delays in the Estate Administration
There are many documents and forms that must be filed with the court, and the court has to oversee any actions taken. This means that there may be a large gap in time from the date of death to when the heirs and beneficiaries receive the assets.
3) The Probate Process Makes Private Information Public
The probate process makes information public that you may wish to keep private. This includes the assets of the estate, their value, and who is designated to receive them.
4) The Probate Process Reduces Your Control
Having an estate go through probate relinquishes control to the courts. The appointed judge will have the final say on asset distributions.
If you would like to maintain privacy, control, and timeliness in the administration of an estate, as well as keep expenses low, read on for ways to avoid probate in California.
3 Ways to Avoid Probate in California
There are a few ways to avoid the probate process in California, which we will discuss below.
1) Establish a Living Trust
The best way to avoid probate is by establishing a living trust in which you can place all of your assets to protect them. This includes real property, accounts, life insurance policies, personal property, etc. As part of setting up your trust you will be able to designate a beneficiary (or multiple beneficiaries) to which the assets should transfer upon your death.
A living trust can also help reduce estate taxes or even allow your beneficiaries to avoid them altogether.
2) Make Beneficiary Designations on Accounts and Policies
Another way to avoid probate is by making sure that any bank accounts and life insurance policies have beneficiary designations assigned to them. Doing so will allow your beneficiaries to have access automatically upon your passing.
3) Get a Transfer on Death Deed for Joint Property
In some cases, joint property will transfer to the surviving owner. However, a transfer on death deed stating joint rights of survivorship may be required in order to avoid probate.
Take Steps to Avoid Probate Today
The Legacy Lawyers team is experienced in probate administration and estate planning. We are here to provide our clients with peace of mind and the assistance they need. Whether you need help administering an estate or are looking to help your loved ones avoid probate upon your passing, you can schedule a consultation with us today by calling 800-840-1998.