How to Avoid Probate in California

Probate is a court-supervised process in which a deceased person’s assets are passed to their heirs in an orderly and organized manner. It guarantees that the person’s wishes explicitly stated in their Will are going to be respected and fulfilled to the letter. It also gives the person’s legal heirs and other beneficiaries of the will the assurance that the estate of their deceased family member will not be mismanaged as the court’s supervision provides a measure of security and accountability.

Yet, despite the security of the probate process, one of the main goals of a solid estate plan is often to avoid probate to the greatest extent possible. Where does this contrast stem from? Unfortunately, probate doesn’t come without its disadvantages and these often both outnumber and outweigh the apparent benefits. For example, court-supervision entails additional, often considerable expenses. They may include court fees, attorney fees, and executor fees. What’s more, probate is lengthy – it can take anywhere between six months and two years before the assets finally find their way to the heirs and beneficiaries. Finally, probate entails a loss of privacy since, being a process administered by a court, all information about the deceased property and related family matters is subject to public disclosure.

So if you are working on your own estate plan and are considering ways to avoid probate, we totally understand where you’re coming from. In this article, you will find practical suggestions that will help you avoid the probate process in California.

Lifetime Gifts

If you are completely certain which elements of your estate you’d like to transfer to which beneficiaries, you may consider doing it even before your passing by the virtue of a provision called a lifetime gift. This estate planning tool – also called a gift inter vivos (from Latin, between the living) – allows a grantor to transfer certain assets during their life and at the same time enjoy certain tax benefits. For example, since the assets transferred this way will no longer be a part of the person’s estate, they won’t be subject to estate taxes upon their death. Additionally, if given to a charity, a lifetime gift can be claimed as a tax credit on the person’s yearly tax return.

It is important to note that gifts whose value exceed $15,000 and are not given to a spouse or a qualified charity are subject to income taxes. Still, a gift inter vivos may be a vital way of passing some of your assets to selected beneficiaries and shielding them for probate.

Joint Ownership of Property

California state laws offer two forms of joint ownership – joint tenancy and community property with right of survivorship. The former can apply to the ownership of various kinds of property such as real estate, vehicles, or bank accounts. Each of the owners – called joint tenants – must own half of the property held in joint ownership. When one of the joint tenants dies, his or her share of the property automatically passes to the other without probate.

Community property refers to property acquired by spouses or domestic partners during their marriage or partnership. Unless specific steps are taken to keep the ownership separate, such property automatically becomes community property – owned jointly by both spouses or registered partners. However, unlike joint tenancy, community property doesn’t come with the right of survivorship. This must be secured by a specific designation in the ownership title. Community property with right of survivorship will pass automatically to the surviving spouse. Otherwise, the surviving spouse can file a spousal property petition and acquire the other part of the community property in question in a process that is much simpler than probate.

Payable on Death (POD) Accounts

If you choose a beneficiary and add a “payable-on-death” (POD) designation to your saving accounts, checking accounts, or certificates of deposits, the money and funds gathered on these accounts at the moment of your death will automatically become payable to the designated beneficiary and will not have to go through the probate process. Additionally, the POD designation can be also used in relation to life insurance policies and retirement accounts. POD is an especially useful estate planning tool since it can provide a person’s surviving family members with immediate access to funds at the time when it is likely they will need it the most.

Consult Solan, Park & Robello on More Estate Planning Tools

In this article, we have mentioned only a few of the essential estate planning tools available in California to avoid the probate process. However, the list of such tools is much longer. Some of them – such as living trusts – are more complicated and more difficult to organize. You definitely need advice from a qualified estate planning attorney to ensure that the largest part of your estate possible will avoid probate.

Solan, Park & Robello are experienced California estate planning attorneys. We provide creative, innovative, and effective solutions to different estate planning issues and scenarios. Contact us today to learn how we can help you create an even better estate plan.

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Solan, Park & Robello

Solan, Park & Robello is a full-service probate and estate planning firm offering experienced counsel in a wide range of estate planning matters—from preparation to administration to litigation.

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