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How To Avoid Probate in California

To avoid probate in California, a person must use legal tools to ensure their property is not solely owned in their individual name. Here are ways you can avoid probate.

Posted on May 16, 2022 by Sara Hillier
Avoid Probate CAL min

When someone dies, their estate will need to go through a legal process known as probate in order to be distributed to the deceased person's heirs. However, some steps can be taken to avoid probate in California. This guide will outline the methods that can be used to avoid probate and what you need to know about each option. By following the tips in this guide, you can make the process of transferring an estate after death much easier for your loved ones.

1. Gifting

When it comes to estate planning, one of the best ways to avoid probate is to simplify your estate, you can start by gifting assets while you are still alive - in doing so, you can ensure that your assets will go directly to your intended beneficiaries without passing through probate.

However, there are a few things to keep in mind when gifting to avoid probate.

First, you need to make sure that the gift is irrevocable. This means that the recipient must be given full ownership of the asset and that you cannot change your mind about the gift at a later date.

Additionally, it is important to keep track of all gifts that you give to ensure that they do not exceed the $16,000 federal gift tax exclusion amount. If you do give gifts that exceed this amount, you will need to file a gift tax return with the IRS. With careful planning, gifting can be an excellent way to avoid probate and simplify your estate.

2. Living Trusts

One way to avoid probate in California is to use a living trust. A living trust is a legal document that allows you to transfer ownership of your assets to another person. This means that your assets will not go through probate when you die. Instead, they will be transferred directly to the beneficiary named in the trust.

You can also name a successor trustee who will manage the trust after your death. This can help to ensure that your assets are distributed according to your wishes and that the probate process is avoided.

Creating a living trust can be an important step in protecting your assets and ensuring that they are distributed according to your wishes.

3. Community Property With Right of Survivorship

Community Property With Right of Survivorship is a way for married couples in California to avoid probate. By holding assets as Community Property, each spouse owns an undivided interest in the property and has the right to use and enjoy it during their lifetime.

Upon the death of one spouse, the surviving spouse automatically becomes the sole owner of the property. assets held as Community Property with the Right of Survivorship are not subject to probate, which can be a lengthy and expensive process. This makes Community Property an attractive option for couples who want to avoid probate.

To hold property as Community Property, couples must meet certain requirements, such as living in California and being married at the time they acquire the property. Couples who already own property can convert it to Community Property by executing a Community Property Agreement.

Once the property is held as Community Property, it cannot be changed back to separate property without the consent of both spouses. For couples who want to ensure that their assets pass to their loved ones without going through probate, Community Property with Right of Survivorship may be the best option.

4. Payable on Death Designations for Bank Accounts

Payable on Death (POD) designations for bank accounts allow account holders to name a beneficiary who will receive the account funds upon their death, without the need for probate. To add a POD designation to an account, account holders simply need to complete a POD form provided by their bank and name their desired beneficiary.

POD designations are an easy and efficient way to avoid probate, as the designated beneficiary can simply present the POD form to the bank after the account holder's death to claim the account funds. POD designations are particularly useful for individuals with simple estates who do not wish to go through the probate process.

5. Joint Ownership

Another way to avoid probate in California is through joint ownership. Joint ownership allows two or more people to own an asset together. When one owner dies, the surviving owner(s) automatically becomes the sole owner of the asset, without the need for probate.

Joint ownership can be either "joint tenants with right of survivorship" or "tenants in common." Joint tenants with the right of survivorship means that each owner has an equal interest in the property and that upon the death of one owner, the surviving owner(s) will automatically become the sole owner of the property.

On the other hand, tenants in common allow owners to hold unequal interests in the property. For example, one owner may own 60% of the property while the other owns 40%. Upon the death of one tenant in common, their interest in the property will be distributed according to their will or trust.

Joint ownership is a simple and effective way to avoid probate, as long as all owners are comfortable with the idea of owning the asset together.

6. Transfer on Death Registration for Securities

California allows shareholders to create a transfer on death registration (TOD) for securities such as Mutual funds, Bonds, ETFs, Stocks and other investments in companies - effectively allowing individuals to name a beneficiary to receive their securities upon their death, without the need for probate.

To add a TOD registration to securities, individuals simply need to complete a TOD form provided by their broker and name their desired beneficiary. TOD registrations are an easy and efficient way to avoid probate, as the designated beneficiary can simply present the TOD form to the broker after the individual's death to claim the securities.

7. Transfer on Death Deeds for Real Estate

A Transfer on Death Deed (TODD) is a deed that names a beneficiary to receive your property upon your death, without the need for probate. TODDs is an easy and efficient way to avoid probate, as the designated beneficiary can simply present the TODD to the county recorder's office after your death to claim the property.

To create a TODD, individuals simply need to complete a TODD form provided by their county recorder's office and name their desired beneficiary.

8. Transfer on Death Registration for Vehicles

Vehicles in California can also be registered with a transfer on death designation, which allows the vehicle owner to name a beneficiary who will receive the vehicle upon their death, without the need for probate.

To add a TOD designation to a vehicle, owners simply need to complete a TOD form provided by the California Department of Motor Vehicles and name their desired beneficiary. TOD designations are an easy and efficient way to avoid probate, as the designated beneficiary can simply present the TOD form to the DMV after the owner's death to claim the vehicle.

9. Simplified Probate Procedures

A small estate affidavit is a legal document that allows the transfer of a person's property after their death without going through probate court. The affidavit can be used for estates worth up to $184500.

State law says you must wait 40 days before filing a small estate affidavit. While waiting for this 40-day period to pass, you may begin putting together your case for a small estate affidavit. This includes ordering a certified copy of a death certificate, while also inventorying a list of all certified assets owned by the deceased. This inventoried list of assets does not include: real property, vehicles, and vessels.

To use the small estate affidavit, the executor of the estate must fill out the form and have it notarized. Then, they must file it with the county recorder's office where the decedent passed and provide a copy to the beneficiaries. If the beneficiaries agree to the terms of the small estate affidavit, they will sign it and return it to the executor. Once all of the paperwork is complete, the executor can then distribute the estate according to the terms of the small estate affidavit.

FAQ

Why Should I Want to Avoid Probate?

the probate process can be time-consuming and expensive. By avoiding probate through methods such as creating a trust, beneficiaries can receive their inheritance more quickly and with less hassle. For these reasons, it is often in a person's best interest to avoid probate if possible.

Can I Avoid Probate If I Have No Assets In My Name?

If you have no assets, there is nothing to distribute, so probate may not be necessary. However, even if you have no assets, your estate may still be liable to pay any taxes owed. Although you may not have any assets it is still a good idea to create a will. Creating a will can help to ensure that your wishes are carried out after your death. for example: who takes care of your animals, your prized belongings etc.

Does My Will Avoid Probate in California?

In the state of California, a will does not necessarily avoid probate. If a person dies with a will, their assets will be distributed according to the terms of the will. In either case, the probate court will oversee the distribution of assets.