How to Avoid Probate in California
Probate is the legal process by which a deceased person’s assets are distributed. In California, like in many other states, probate can be an expensive and time-consuming affair, especially in circumstances in which the will is contested or the estate is large. Considering that the probate process usually begins immediately after the death of a loved one, many Californians would prefer to properly mourn their loss and spend time with their loved ones, not learning the complex laws of probate proceedings. Thankfully, through proper estate planning, California residents and their families may be able to avoid probate altogether.
Here are several of the most popular options for avoiding probate in California:
A Living Trust Can Help Avoid Probate Court for Your Heirs
Under California laws, almost any asset or property can be placed into a living trust. The living trust will be managed by a “Trustee” for the benefit of the beneficiaries. Typically, the person placing all of his or her assets and property into the trust will be the Trustee of the Trust. The Trustee will retain all rights and ownership of the assets and property held in the trust during his or her lifetime. The Trustee will also create a document that explains how the assets in the trust should be distributed when he or she passes away. Because assets being held in a trust fund are technically owned by the trust, and not the Trustee, a living trust allows for the beneficiaries (typically, family members) to avoid both probate and the estate taxes that would apply if the assets and property were owned by Trustee instead of the trust fund.
Joint Ownership with Rights of Survivorship
For real property, including houses or parcels of land, a property that is owned with another person and includes “rights of survivorship” will automatically pass to spouse, partner, or other co-owner upon the passing of the other property owner. There are two main types of joint ownership with rights of survivorship in California. First, a joint tenancy is property owned by two people that will automatically pass to one owner when the other one passes away. Joint tenancies are common in California for joint ownership of property, vehicles, and bank accounts. While the couple does not have to be married, California law does require each joint tenant to own an equal share. The second type of joint ownership with rights of survivorship is community property with rights of survivorship. As a community property state, any property acquired during a marriage is typically owned jointly by the married couple. When one of the spouses or domestic partners passes away, then the ownership to the property will automatically transfer to the surviving spouse.
Payable-on-Death or Transferable-on Death Designations
In California, bank accounts can have a “payable on death” designation which automatically transfers the bank account and its assets to the named beneficiary. Similarly, California law allows “transferable on death” designations on multiple types of assets, including stocks and bonds, real estate, and vehicles. These designations allow the named beneficiary to automatically receive the asset without going through the probate process.
If you are looking to help your family members and assets circumvent the California Probate Court, an experienced estate planning attorney can help. They can explain available options, develop and then implement probate avoidance estate planning to protect you and your family.
Scot Thomas Moga, a dedicated attorney in San Bernardino & Riverside Counties who represents clients in the many types of personal injury, workers’ compensation and estate planning cases.