Avoiding Probate in California
Probate (court proceedings to enable the transfer of assets of a deceased person to the people who inherit them) can be long, costly, and confusing. However, different states offer different ways to avoid probate. In California, you can avoid the hassle of probate with these several options.
Creating a living trust for any asset you own, whether it be real estate, bank accounts, vehicles, etc., is one way to bypass probate. A trust is a document that names someone to take over as trustee after your death (called a successor trustee). You must transfer ownership of your property to yourself as the trustee of the trust. This will allow your successor trustee, at the time of your death, to be able to transfer it to the trust beneficiaries without probate court proceedings.
Owning property jointly with someone else, where the ownership includes the “right of survivorship,” automatically transfers the portion owned by the descendant to the surviving owner when the other owner dies. Though it will take some paperwork to show that title to the property is held solely by the surviving owner, no probate is necessary.
If you own an asset in joint tenancy, the asset automatically passes to the surviving owners when one owner dies. No probate is necessary. This applies to real estate, vehicles, bank accounts or other valuable property owned jointly and often works well with couples (married or not) as each owner, called a joint tenant, must own an equal share.
Community Property With Right of Survivorship
California is a community property state, which means that spouses and registered domestic partners generally own property acquired during the marriage jointly unless they take extra steps to keep it separate. Therefore, if a spouse or partner holds title to an asset as community property with the right of survivorship, it automatically passes to the survivor when one spouse or partner dies.
A “payable-on-death” (POD) designation for bank accounts offer an easy way to keep money out of probate. You still have access and fully control all the money in the account (you can even spend it all, if you want), as your POD beneficiary has no rights to the money. However, at your death, the beneficiary can claim the money directly from the bank without probate court proceedings.
Transfer-on-Death Deeds for Real Estate
California also allows you to leave real estate to a beneficiary with a transfer-on-death deed. These “beneficiary deeds” are signed and recorded as typical, but upon your death, the beneficiary you name on the deed will have rights to the real estate without probate proceedings. Until then, you can revoke the deed or sell the property at any time.
Transfer-on-Death Registration for Vehicles
Similarly, California allows transfer-on-death registration of vehicles. This means that if you register your vehicle this way, the beneficiary you name will inherit the vehicle after your death, and no probate court proceeding will be necessary.
Transfer-on-Death Registration for Securities
This applies to stocks and bonds too. California allows you to register these with a transfer-on-death (TOD) form. If you register an account in TOD (also called beneficiary) form, the beneficiary you name will inherit the account automatically at your death without probate court proceedings.The beneficiary then deals directly with the brokerage company to transfer the account.
Simplified Probate Procedures
Your estate may qualify for California’s simplified “small estate” probate procedures. These are probate shortcuts for surviving spouses and for “small estates.” These procedures make it easier for survivors to collect property left by a person who has died. As of 2022, small California estates with assets worth $184,500 or less may be settled without formal probate proceedings, using relatively simple transfer procedures. Outside of the property’s worth, no administration proceedings may be pending or may have been conducted for the decedent’s estate (if they have, the personal representative must consent in writing to the summary probate procedure).
How Evolution Tax and Legal Can Help You Avoid Probate in California
Creating a comprehensive estate plan can protect your loved ones from the cost, delays, and frustration of probate. The Orange County probate lawyers at Evolution Tax and Legal have years of experience working with individuals and their families to help provide knowledge and discuss your specific circumstances to create peace of mind and an effective strategy to avoid probate. Schedule a consultation today.