4 Proactive Steps You Can Take To Avoid Probate In California

Jan 11, 2024

Dealing with probate after a loved one passes is like navigating a legal maze, and it can cause a significant amount of undue stress in a time when a person is already struggling with their grief. This process can drag on for what feels like forever, often more than a year, while piling up hefty fees that eat into the inheritance your relative meant for you. 

Realistically, probate can contribute to taking up the majority of an individual’s time until it is resolved, which is extremely inconvenient when they are in mourning and trying to move on with their own daily life. This is likely the last thing you want your family to have to endure in the wake of your passing. 

Here’s the good news: probate doesn’t always have to happen! There are certain legal measures you can take to help your loved ones avoid the complicated California probate process, and there is no better firm to walk you through taking these proactive steps than Karpel Law Firm. We are dedicated to helping our clients give their family the peace of mind they need to focus on what really matters during a tough time.

Decoding Probate: Understanding California’s Legal Landscape Following The Death Of A Loved One

At its core, probate is just the court-monitored process that must happen following an individual’s passing in order to make sure their estate (all the money and property they owned) is passed on to the right people. In most cases, trusts will bypass the probate process, as will estates valued at less than $166,500. 

Unfortunately, just having a will doesn’t magically save you from probate, but it can make the whole process smoother, especially when it comes to divvying up the decedent’s property. If they didn’t leave a will or trust, they’re officially “intestate,” and California’s laws of intestate succession decide how their property gets shared out.

The reason probate is usually troublesome for the family is because someone must step up to serve as the executor or administrator, which comes with a long list of duties, like figuring out if probate is needed, filing the will in the right county court, throwing in a petition for probate, and being the go-to person for all probate-related questions. This person must fully immerse themself in an intricate legal process and agree to be held accountable for however long it lasts. There’s also the possibility that complications will arise, like will challenges or lawsuits, which they will have to handle. 

To put it bluntly, probate is a lot for someone to handle – especially someone who has their professionals and personal responsibilities to deal with and is also in the throes of the grieving process. It’s easy for mistakes to be made and for things to get messy quickly. It’s best if you can plan to help your family avoid probate now, by taking the following 4 steps:

Step #1: Create A Trust

Trusts function as distinct legal entities separate from your personal ownership. They enable the seamless transfer of assets in and out of your name. One of the most beneficial features is that any property held within a trust avoids the probate process, facilitating a direct transfer to your chosen beneficiaries upon your death. Establishing a trust, or a combination of different trusts, presents additional advantages, including enhanced asset protection, the reduction of federal and estate taxes, and the flexibility to customize the distribution of your wealth according to your preferences.

Various types of trusts are available, and seeking guidance from a knowledgeable estate planning attorney is the best way to determine which of them are the most suitable options that are aligned with your individual goals. A few examples include:

  • Revocable trusts
  • Irrevocable trusts
  • Special needs trusts
  • Testamentary trusts
  • Education trusts
  • Charitable trusts
  • Generation-skipping trusts
  • And more!

Step #2: Take Advantage Of Joint Ownership

Engaging in joint ownership stands as an effective strategy to avoid the probate process. When you co-own property with another individual, particularly a spouse, the concept of “right of survivorship” comes into play. This legal provision ensures that in the event of your passing, all jointly owned assets seamlessly transfer directly to your co-owner, sidestepping the probate proceedings.

In California, the legal framework outlines three primary forms of joint ownership: joint tenancy ownership, tenancy in common, and community property. Generally, joint tenancy and community property are modes of co-ownership suitable for married couples or close family members, whereas tenancy in common does not carry this familial requirement. 

Once again, engaging the expertise of an experienced estate planning attorney can provide clarity on the nuances of joint ownership. They can offer valuable insights into whether joint ownership aligns with your specific needs and circumstances, guide you through the intricacies of California law pertaining to joint ownership, and ensure that you have a comprehensive understanding of your available options and their implications.

Step #3: Designate Property As Payable-On-Death Or Transfer-On-Death.

A payable-on-death (POD) or transfer-on-death (TOD) designation offers a path to probate-avoidance by facilitating the transfer of specific property types, such as stocks and bank accounts, directly to your beneficiaries upon your death. It is crucial to highlight that while POD and TOD designations are commonly employed for various assets, they are not typically utilized for real estate in California. In lieu of these designations, the state provides a comparable mechanism known as a revocable transfer on death deed (RTOD) specifically tailored for real property.

Step #4: Gift Your Assets To Loved Ones.

Transferring assets to your family members during your lifetime can be a strategic move to bypass probate. Assets held in your name are the ones subject to probate proceedings upon your passing, but gifts given before your demise don’t fall under this category. This not only expedites the transfer process but also aids in reducing taxes and lowering the overall value of your estate.

It’s crucial to understand the difference between gifting assets and bequeathing them in a will. While assets left in a will are still subject to probate, gifted assets, if properly transferred into someone else’s name before your death, avoid probate entirely. California, notably, doesn’t impose a gift tax, allowing you to gift any amount of money or property to your loved ones without incurring state taxes. However, be mindful of potential federal tax obligations.

Trust Karpel Law Firm To Help You Accomplish Your Goals!

If making sure your loved ones avoid having to endure the probate process on behalf of your estate, we can determine which strategy would be most effective based on your unique personal and financial circumstances. Our legal team is seasoned in the field of estate planning and has over 70 years of experience! Call today to schedule your free initial consultation where we can answer your questions and get you on the path forward.