Probate is a complicated legal process that many families in California and all over the United States have to navigate following the death of a loved one. It can often drag on for months (or even longer than a year!) all while racking up expensive fees that deplete the hard-earned wealth an individual planned to leave to their heirs. Because probate is notoriously time-consuming, expensive, and stressful, it’s not something you want your family to have to deal with while they’re grieving your loss and trying to balance the day-to-day responsibilities in their own life.
The good news is that there are steps you can take to avoid probate! Hayes Law Firm can help you understand what legal protections you need to have in place and give you and your loved ones peace of mind that your estate will be able to bypass the probate process.
What Does Probate Look Like In California?
Probate is necessary when an individual passes away in California without a trust, and with property that is valued at more than $166,500. Unfortunately, having a will alone does not keep an estate from going through probate, though wills generally make probate a more straight-forward process, especially when it comes to distributing the decedent’s property. If the decedent had no will or trust, then they are considered to have died “intestate,” in which case their property is distributed according to the California laws of intestate succession.
Someone (typically a family member) must oversee the probate process and serve as the estate executor or administrator. This individual has many responsibilities, such as:
- determining whether the decedent’s estate needs to go through probate
- filing the will with the court of the county where the decedent lived
- filing a petition for probate
- answering any questions about probate administration
- explaining legal options in clear language
- providing personalized legal advice regarding probate administration
- taking inventory and appraising the decedent’s assets
- providing written notice to the will’s beneficiaries and creditors
- obtaining affidavits and declarations from the attesting witnesses
- negotiating debts with creditors
- filing an estate tax return and paying estate taxes
- distributing assets to heirs and beneficiaries
- preparing a final accounting
- And more.
Serving as executor or administrator is a significant undertaking, especially for a person who is in mourning and also juggling the responsibilities of their personal life. There is also the chance that complications could arise that cause probate to last even longer and become especially messy, such as will contests or other lawsuits.
While probate isn’t inherently “bad,” it is complex and burdensome enough that it’s worth following the subsequent 5 steps to try and help your family avoid having to endure it.
Step #1: Create A Trust.
Trusts are entities separate from you, which you can transfer assets into and out of your name. This means that any property owned by a trust does not need to go through the probate process, and can be transferred directly to your beneficiaries upon your death. There are also other benefits to establishing a trust (or a combination of trusts), such as stronger protection for your assets, the minimization of federal and estate taxes, and the ability to customize and control how your wealth is distributed.
There are many different types of trusts, and a knowledgeable trust attorney can help you get a better idea of which one (or several) will most likely accomplish your individual goals. Some examples are:
- Revocable trusts
- Irrevocable trusts
- Special needs trusts
- Testamentary trusts
- Education trusts
- Charitable trusts
- Generation-skipping trusts
- And more!
Step #2: Utilize The Right Type Of Joint Ownership.
Joint ownership is another effective way to avoid probate. By owning a property with another individual, such as your spouse, they will have “right of survivorship”, which means that all of your assets that were owned together with them will transfer directly to them (without having to go through probate) upon your death.
California law dictates 3 forms of joint ownership: joint tenancy ownership, tenancy in common, and community property. In general, joint tenancy and community property is co-owned by a married couple (or close family members), while tenancy in common is not. An experienced estate planning attorney can help you understand more about joint ownership and determine if it is the right tool for you!
Step #3: Gift Assets To Loved Ones Before Death.
Only assets that are in your name have to undergo probate when you pass. So, if you give your family members property and assets during your lifetime, those gifts won’t be subject to probate. This can also help you to decrease taxes and decrease the overall value of your estate.
Remember that gifting assets is different from leaving them behind in a will, which will not enable them to avoid probate. You will need to give your assets away and ensure that they are owned in someone else’s name before your death. Many people don’t know that California does not enforce a gift tax, meaning you can gift any amount of money or property to loved ones without owing a state tax; however, you might owe a federal tax. You can gift up to $17,000 in the 2023 tax year without triggering a gift tax return, but any gift valued higher than that amount will.
Step #4: Designate Property As Payable-On-Death Or Transfer-On-Death.
A payable-on-death or transfer-on-death designation can avoid probate by transferring certain types of property, like stocks and bank accounts, to your loved ones after your passing. However, it’s important to note that POD and TOD designations are not typically used for real estate in California, though the state does have a similar mechanism called a revocable transfer on death deed (RTOD) for real property.
Step #5: Work With A Seasoned Estate Planning/Probate Attorney.
Probate law in California is considerably intricate and changing constantly. A probate or estate planning attorney can help you gain a better understanding of all of your options for avoiding probate and navigating ownership transfers, as well as preventing costly mistakes.
Contact Hayes Law Firm To Get Started
Our priority is educating you so that you can make informed decisions that leave you feeling confident about the future of you and your family. Our lead attorney, William Hayes, has over 40 years of legal experience and has helped countless clients protect what matters most! Call today to schedule your free initial consultation and learn more about how we can serve you.
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