Probate is a legal process that validates a will and ensures the equitable distribution of a deceased person’s assets by their final wishes. It provides a forum for the settlement of any outstanding debts or taxes, the resolution of disputes over the terms of the will, and the transfer of property ownership.
Avoiding probate in California can save beneficiaries significant time, expense, and stress. Several strategies can help to circumvent the probate process. One such method is the creation of a Revocable Living Trust, which transfers your assets into a trust managed by a trustee for the benefit of your beneficiaries. Assets held in a trust do not pass through probate.
Another approach is the designation of beneficiaries for retirement accounts, insurance policies, and other accounts, known as Payable-on-Death (POD) and Transfer-on-Death (TOD) designations. Lastly, joint ownership of property, termed Joint Tenancy with Right of Survivorship, allows the property to pass directly to the co-owner without going through probate.
Greiner Law Corp is a California law firm specializing in estate planning and probate. This blog features articles covering the basics of California probate law and tips on avoiding the probate process. Let’s get started.
what Does Probate Mean In A Will
Probate is a legal process following an individual’s death, where their estate is administered and distributed under court supervision. This process starts when the executor, named in the will, or a personal representative (if there’s no will) presents the will for probate in a probate court. If the will is deemed valid, the court will oversee the process to ensure the deceased’s debts are paid and any remaining assets are distributed to the named beneficiaries.
Probate law varies from state to state, and individuals must understand their state’s requirements to ensure seamless execution of their will. The probate process can be time-consuming and expensive, as the court charges a filing fee plus attorney’s fees. Additionally, the entire process is public record, so any assets owned that pass through will become public knowledge. To avoid this hassle and expense of probate, there are several strategies you can use.
Who Needs Probate?
Probate is only necessary if an individual has assets in their name that must be transferred after death. Assets such as certain bank accounts, investments, and real estate must go through probate.
Assets held jointly with rights of survivorship or those passed on via a living trust do not need to go through probate. Determining whether probate is required can be complex, as it depends largely on the nature of the assets in question. Here is a closer look at who might need to go through the probate process.
Single Ownership Assets
Assets solely owned by the deceased, with no designated beneficiary, usually must go through the probate process. These include savings or checking accounts, stocks, bonds, physical properties, etc. They are considered part of the decedent’s estate and should be transferred following legal procedures.
Shared Assets Without Rights Of Survivorship
If the deceased shared ownership of an asset without providing the ‘rights of survivorship,’ this asset would have to go through probate. ‘Rights of Survivorship’ ensures that the surviving owner(s) automatically acquires the deceased owner’s asset share. But in its absence, the deceased’s asset share becomes part of their estate and requires probate.
Assets Without A Named Beneficiary
Certain assets like life insurance policies or retirement accounts allow the owner to name a beneficiary. If no beneficiary is designated, the named beneficiary is deceased, and no contingent beneficiary is specified, these assets must go through probate.
Probate Types | Depending On Will
Depending on whether a deceased person passed away with a legally valid will, probate, the legal process of settling their estate, can be divided into two types. When a person dies with a will, it is referred to as “testate probate,” where the court oversees the distribution of assets according to the deceased person’s wishes as stated in the will.
On the other hand, if someone dies without a will, it is called “intestate probate,” the court follows the laws of intestate succession to determine how the assets will be distributed among the deceased person’s heirs. Testate and Intestate.
Testate Probate
Testate probate occurs when an individual dies, leaving a valid will behind. The will serves as an instruction manual, directing how the deceased person’s estate should be divided and who shall inherit the assets. The court’s role in testate probate is only to facilitate the execution of these instructions, ensuring that the distribution of assets aligns with the deceased’s wishes.
A legally valid will must adhere to specific requirements, varying from jurisdiction to jurisdiction. Generally, the will-maker, or ‘testator,’ should be of legal age and sound mind when creating the will. The document should be written, dated, and signed by at least two witnesses who are not beneficiaries.
They often name an executor responsible for estate management throughout the probate process. Their duties include filing the will with the probate court, notifying beneficiaries and creditors, settling the decedent’s debts, and distributing assets per the will.
Intestate Probate
Intestate probate arises when an individual dies without leaving a legally valid will. In this scenario, the court has to step in and oversee the distribution of assets according to the laws of intestate succession. Every state enacts these laws and outlines a default inheritance hierarchy, prioritizing direct family members.
Typically, the spouse and children are first in line to inherit. The assets may go to parents, siblings, or distant relatives without surviving spouses or children. The assets eventually escheat to the state if no relatives can be found.
In an intestate probate, the court appoints an administrator, often a close family member, to handle the estate. The administrator’s responsibilities are similar to those of an executor in a testate probate.
Comparing Testate And Intestate Probate
Testate and intestate probates differ in how they distribute assets and their court involvement level. The primary distinction lies in control over the estate. In a testate probate, the deceased maintains control, through their will, over who inherits their assets. In contrast, an intestate probate leaves the division of assets to the state’s intestacy laws, potentially leading to outcomes the decedent may not have desired.
Both processes can be time-consuming and potentially contentious. While having a will can streamline the probate process, it doesn’t eliminate potential disputes among beneficiaries. Furthermore, intestacy can lead to complex situations if the decedent has a non-traditional family structure.
Step-Wise Guide to Probate With A Will
You can easily navigate the probate process for an estate with a will by following this step-by-step guide below. With clear instructions and helpful tips, you’ll gain a comprehensive understanding of each stage, ensuring a smooth and efficient probate experience. From gathering necessary documents to distributing assets, this guide will give you the knowledge and confidence to handle the probate process easily.
- Locate The Decedent’s Will
The first step to probate with a will involves finding the decedent’s last will. The decedent will often tell a trusted individual where they kept their will. It could be in a safe deposit box, file cabinet, or with a lawyer.
- Submit The Will To The Probate Court
Once the will has been located, it must be submitted to the local probate court. This step officially begins the probate process. The will is then reviewed by the court to verify its validity.
- Inventory The Decedent’s Property
After the court has validated the will, the next step is inventorying the decedent’s property. This includes any real estate, personal property, and financial assets. It’s essential to establish the value of these assets at the time of the decedent’s death.
- Pay The Decedent’s Debts And Taxes
The executor must also use the assets in the estate to pay off any outstanding debts and taxes owed by the decedent. In some cases, selling some of the estate’s assets might be necessary to cover these costs.
- Distribute The Remaining Assets
Once all debts and taxes have been paid, the remaining assets can be distributed as designated in the will. If any disputes arise during this process, the probate court will resolve them.
- Close The Estate
The final step in the probate process is to close the estate. This involves preparing a final accounting that details all financial transactions made throughout the probate process. The final accounting is submitted to the court for approval.
In conclusion, probating a will can be a complex process. It requires careful attention to detail and a thorough understanding of the probate laws in your state. Greiner Law Corp can help you navigate these legal complexities and ensure that the decedent’s wishes follow California law.
Avoid Probate In California
Having a will does not necessarily mean that probate can be avoided in California. If the deceased owned real estate in their name only or had personal property worth more than $166,250 (in 2022), probate will typically be required regardless of whether a will exists.
However, exceptions exist – for instance, assets held in a living trust, joint tenancy property, pay-on-death bank accounts, and certain types of retirement and life insurance benefits can often avoid probate. Similarly, estates of small value may also be exempt from probate. Always consult a qualified legal professional to understand the specifics of your situation and the current law.
Avoiding probate in California can effectively ensure a faster and more cost-effective distribution of assets upon one’s death. Probate can be lengthy and expensive; thus, many individuals seek strategies to bypass this probate proceeding.
Joint Ownership Of Property
One potential strategy to avoid probate in California is through the joint ownership of property. This can be accomplished through joint tenancy or community property with the right of survivorship. In both these arrangements, upon one owner’s death, the property automatically passes to the surviving owner without probate.
Revocable Living Trusts
Another popular tool for avoiding probate is the creation of a revocable living trust. In this legal agreement, you transfer your property into a trust for your benefit during your lifetime. Your property passes to your designated beneficiaries upon death, avoiding the probate process. It’s important to note that setting up a trust requires a written agreement and moving your property into the trust.
Payable-On-Death And Transfer-On-Death Designations
In California, you can add a payable-on-death (POD) designation to bank accounts and a transfer-on-death (TOD) designation to securities and certain real estate. These designations allow these assets to pass automatically to the designated beneficiaries upon death, bypassing probate.
Gifts And Death Avoidance
Finally, another option for avoiding probate in California is simply to give away your property before you die. This reduces the size of your estate and the assets that would need to go through probate. However, this strategy requires careful planning and consideration to avoid potential gift tax liability.
Conclusion
A will serves as a legal document outlining your wishes regarding the distribution of your assets and the care of any minor children in the event of your demise. Without a will, state laws, known as intestacy laws, dictate these distributions.
Probate is an often-dreaded event that can be expensive and time-consuming. Fortunately, many ways to avoid probate in California exist, such as joint ownership of property, revocable living trusts, payable-on-death and transfer-on-death designations, or gifting assets before death.
It’s essential to seek advice from a qualified attorney to ensure that you understand the legal implications of each option and can make an informed decision. Ultimately, planning is the key to helping your estate avoid probate. Greiner Law Corp is a law firm in Los Angeles, California, specializing in probate and estate planning. Contact us today for a free consultation, and we’ll help you make the best decisions for your family.
