In many cases, probate is required to settle an estate in California. But if you wish to minimize the probate process for your beneficiaries, or perhaps enable them to avoid it altogether, there are several steps you can take.
1. Organize assets and title them appropriately for your wishes and circumstances. Some assets do not require probate prior to distribution to beneficiaries. These include: assets held in a trust, life insurance policy benefits, and properties titled with rights of survivorship. Bank accounts and retirement accounts with Payable-on-Death or Transfer-on-Death designations may also avoid probate.
2. Create a will. The existence of the will by itself will not necessarily avoid probate. But it is a necessary document to prove your wishes for the handling of your estate. Please keep in mind that if a challenge to your will is filed, probate may still occur. For this reason you should have legal guidance regarding the creation of your will.
If you pass away without a will, the assets of your estate will be distributed according to CA state law and the decisions of the court.
3. Consolidate and reduce outstanding debts, or eliminate them if possible. The fewer creditors that have to be notified of your passing, and the fewer creditor claims against the estate, the better.
4. Consider gifting assets to beneficiaries and charitable foundations while you are living. This is known as an inter vivos gift. However, gifts that exceed a cash value of $15,000 per year may be subject to gift taxes, if the recipients are other than your spouse or qualified charity. Your professional tax planner and estate attorney should be consulted first.
5. The size of your estate affects the probability of probate. If the estate is worth $166,250 or less, a probate attorney may file an affidavit with the court to distribute assets to the beneficiaries. There are formalities involved and a waiting period of 40 days, but the process is less expensive, and more simplistic, than typical probate. Discuss your situation with a probate attorney to see if this may be an option for your estate.
Please note, this article is intended to provide general probate information and introduce related topics. We cannot provide you with legal advice, nor is any content in this article intended as legal advice.
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