The probate process is something that you should be aware of when you are devising your estate plan in California. This is a legal process, and it comes into play when a person has property their your direct personal possession at the time of their passing.
Property that is considered to be probate property would not be distributed to the heirs until the estate was probated and closed by the court. Because this process can be time-consuming and expensive, people sometimes implement probate avoidance strategies. The state of California has one of the most expensive and time-consuming probate processes in the United States.
There are some types of asset transfers that are not subject to the probate process. Let’s look at some of them.
Life Insurance Proceeds
When you take out a life insurance policy on your life, you name a beneficiary. After you pass away, the insurance company will pay the beneficiary, and the transfer would not be subject to the probate process.
Payable on Death Accounts
Many banks and brokerages offer payable on death accounts. These accounts are alternately referred to as transfer on death accounts.
With this type of account, you name a beneficiary. The beneficiary cannot access the assets in the account while you are living, so there is no loss of control.
After you pass away, the beneficiary or beneficiaries would assume ownership of anything that is left in the account. The probate court would not be involved, so the transfer would take place in a timely and efficient manner.
It is possible to add a co-owner to property that is in your possession. This co-owner would be called a joint tenant.
The joint tenant would inherit the entirety of the property that was held in joint tenancy after your passing outside of probate.
This can sound great, but the joint tenant would own half of the property while you are living. As a result, the property could be attached if the joint tenant was to encounter legal or financial difficulties such as debts, judgments, divorces, tax liens, etc.
Revocable Living Trusts
If you were to convey property into a revocable living trust, you would name a trustee to administer the trust after you die. After your death, the trustee would follow instructions that you leave behind in the trust declaration. Assets would be distributed to the beneficiaries, and the probate court would not be involved.
Learn More About Probate
We have scratched the surface in this post, but we have a more comprehensive resource that is available to you if you want to learn more about probate.
Our firm has prepared a series of special reports that cover many different estate planning and elder law subjects. There is a report in our electronic library that focuses on the probate process.
This report is free, and you can visit this page to access your copy: Los Angeles CA Probate.
To Schedule a Free Consultation
If you are interested in the possibility of working with our firm after learning these facts, please select our “Workshops” tab to RSVP for a free estate planning workshop. At that workshop you will be offered a free one-hour consultation with an attorney: www.collinslawgroup.com/seminars/
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