Losing a loved one is an extraordinarily difficult experience. The probate proceedings that often take place after a death can serve to compound the emotions experienced by a grieving family, especially if the estate requires a lengthy period in probate. The thought of adding to the already heavy burden experienced by their surviving family members leaves many people asking themselves if probate is always necessary.
In fact, each state can create its own statutes that dictate how and when the probate process will occur. In the state of California, there are some cases where an estate is not required to go through probate after a death. Whether or not probate is necessary depends on the estate planning documents the deceased individual created before their death, as well as the size and type of the assets within the estate.
Why Does Probate Happen?
Probate is a critical legal process that occurs after an individual passes away. Probate assesses the estate, including debts, real property, and financial assets, and aims to transfer ownership of any assets to the decedent’s beneficiaries according to their wishes. Probate also allows the state to fulfill any debts or taxes owed in order to close the estate.
Probate begins by appointing an executor as named in the will and proving the will valid. This step must occur before the executor can begin listing the estate’s assets, appraising any property, paying debts, and distributing the remaining property. For the family, probate helps to ensure the estate is distributed according to the final wishes of the decedent.
Does All of the Property of the Deceased Go to Probate?
A will is an effective way to indicate your final wishes and is necessary to ensure probate court is not forced to distribute your property according to California intestacy laws. Still, since a will must be proven in probate, certain assets are best included in a will and must undergo probate. Here is a breakdown of common probate and non-probate assets.
Probate assets are pieces of property that are often included in a will and typically go through probate to be redistributed unless other distribution measures are put in place. These assets include both real and personal property owned individually by the decedent. Some examples of probate assets include:
- Homes and any other real estate including farms and vacation homes
- Checking and savings accounts
- Furniture, décor, and household items
- Valuable art and collectibles
- Stocks or interests in a business
While most personal assets must go through probate, there are also a small number of exceptions, referred to as non-probate assets. Non-probate assets are not required to through the probate process. Non-probate assets include:
- Jointly owned property with right of survivorship
- Community property as determined by the state
- Bank accounts or life insurance policies with listed beneficiaries
- Property in a living trust
- Estate assets totaling less than $166,250
Many people begin estate planning with the express purpose of sparing their families the burden of a lengthy probate process. As briefly outlined above, it is possible to avoid the bulk of the probate process by ensuring assets are not subject to probate. There are three major ways to exclude an estate from probate:
- Establish Joint Property Joint property is property that is owned jointly, or co-owned, between two or more people. Community property acquired in marriage is also considered joint property. Any assets that are considered joint property of the deceased will experience “right-of-survivorship,” resulting in the automatic transfer of full ownership to the surviving party (usually a spouse). Any part of the estate considered joint property can usually avoid the probate process. For assets not jointly owned, you can assign a payable on death designation or transfer on death deed to assign ownership upon your death.
- Place Property in a Trust All assets held in a trust are considered non-probate assets, meaning they don’t have to go through the legal process of probate to be redistributed. Ownership of assets in a trust automatically transfers to the designated trustee after the trustor’s death. The trustee is then responsible for distributing assets to the named beneficiaries under the conditions outlined in the trust. Since the property no longer belongs to the estate, but the trust and trustee, it is not subject to distribution in probate.
- Value the Estate Below $166,250 Non-trust assets that are individual property and valued at under $166,250 combined can often avoid probate in California due to the rules regarding small estates. Your probate attorney can file a small estate affidavit, also known as a Petition to Determine Succession to Real Property. The petition can allow beneficiaries to undergo a simplified process to decide inheritance outside of probate court.
What Is the Probate Process Like?
The probate process can last anywhere from 4 to 18 months in California, depending on the size of the estate and whether the estate owes federal tax. Regardless of the estate’s complexity, probate involves four major phases:
- Filing for probate. After an individual dies, a probate attorney must file a petition to validate any existing will documents. While the will itself identifies the executor of the estate, the executor cannot distribute any assets to beneficiaries or take any other action until the will has been validated.
- Sending notices. Once probate has been initiated and an executor identified, the executor must send notices of the individual’s death to any creditors and other entities. These notices are required to allow creditors and government agencies to decide whether they will file a claim for the payment of any debts and taxes. In California, probate must remain open for at least four months to give creditors time to submit claims. The IRS has nine months to respond with any federal tax bill.
- Assessing property. The next phase of probate involves the executor compiling and assessing each asset held in the estate. The probate attorney often assists with aspects like appraisals to help ensure the valuation of the estate is as accurate as possible.
- Finalizing probate. The final phase of probate involves settling all claims and debts that were filed since probate began. Once debts and taxes are paid, the final distribution of the evaluated assets can begin, and the will can be carried out as intended. After all property has been redistributed, the estate will be legally closed.
Secure Help with Probate in California
Probate is a process many individuals hope to spare their loved ones via proper estate planning. However, probate is sometimes necessary after a death. As a result, it is crucial to secure the services of an experienced probate attorney you can trust to help you or your loved ones navigate the probate process.
At Huber Fox, we are dedicated to providing quality estate planning and trust services to California residents. Our skilled probate lawyers can ensure your assets and your family are protected after your death. For estate planning or assistance with a looming probate process, visit our site to schedule a consultation.