Does My Will Avoid Probate in California?

by | Mar 6, 2023 | Estate Planning | 0 comments

Are you interested in learning how a will can help you avoid probate in California? We’re going to look at that hard question in this blog article. There are methods to limit or entirely avoid probate because it is so costly in California. Yet the best instrument for the job is not a will.

Is It Possible To Draft A Will Without Probate?

Probate in California can be avoided (or at least minimized) with careful planning far beyond creating a will.

It is because wills must go through probate if your estate exceeds $184,500, subject to some exceptions. Yet, it depends on the type of assets you have and how they are transferred. If you do this correctly, you can keep all or most of your assets out of probate.

What Motivates You to Desire to Avoid Probate?

The main three reasons you would desire to avoid probate are as follows. The price of probate is the first. The costs for the personal representative and the probate attorney are established amounts that vary incrementally with the size of the estate and are based on a gross fixed percentage of your assets. Overall, it may amount to a sizeable sum.

The worst aspect is that beneficiaries sometimes get substantially less than they were charged probate costs because taxes or other debts must be paid from the gross amount. Suppose they have assessed a probate fee on assets worth $600,000, which equates to about $15,000. Yet, after deducting debts and taxes, they could only receive $150,000, which implies the probate charge represents 10% of the real estate. It’s a lot, that!

Also, the probate procedure might take an extended period. Precisely how long it will take will vary, but it might take a year or more in many cases. In addition, there will be a lot of effort, such as filling out paperwork and attending court. Also, avoiding probate is vital to the heirs since they naturally want their money or other assets as quickly as possible.

Due to the probate procedure, the will and its details will become public records. If maintaining your privacy is important to you, you might wish to use any further alternatives you have to prevent disclosing your personal information.

Does Probate Have to Be Filled for Anything You Own?

You don’t have to go through probate for every asset you possess. There are many exceptions to the rule. In reality, that’s where trusts and pooled assets come into play.

Shared Assets

Suppose a property is co-owned with another person or persons as joint tenants, such as a house, a vehicle, or a bank account. In that case, that property immediately passes to the other owner or owners upon the death of one of the owners. As a result, co-owned property avoids probate and passes to its recipients immediately.

In reality, you may specify on your registration which the automobile should belong to when you pass away, even if it is not already a shared asset. In this manner, it will be automatically given to the recipient and escape probate.

The same holds for assets with beneficiaries mentioned by name, such as life insurance or retirement plans, including 401(k)s. Also, those assets will be instantly transferred to the specified beneficiaries without going through probate. Beneficiaries for bank accounts can also be nominated, avoiding the need for probate. Yet, depending only on these transfer-on-death (TOD) clauses to avoid probate can be risky and have several unforeseen implications.

The Benefits of Trusts in Avoiding Probate

The most crucial instrument for avoiding probate is a trust. A trust’s assets are exempt from the probate process. A living trust is the most excellent choice for the majority of individuals.

You can put your assets into a living trust while alive. You are usually the trustee at that time, and you must specify who will take over following your passing. After your death, this person—the successor trustee—will divide your assets per your instructions without needing a probate court case.

Your living trust can be amended and changed anytime while you are still alive, allowing you to change your mind about who should receive what in the future.

Don’t overlook the “small” things while listing your assets. It may include apparel, jewelry, home goods, furniture, etc. The quantity left over will increase proportionately to how many are excluded.

Technically, you don’t need a will if you have a thorough living trust. Yet, the majority of lawyers advise creating a so-called pour-over will. It would include anything unintentionally omitted from your trust or added following the last revision. It may also include provisions like appointing a guardian to look after small children.

Because of this, it’s crucial to include everything you can in your trust, including home goods, and to evaluate it periodically. Your pour-over won’t have much value, making it likely to be eligible for a shortened probate procedure or even not requiring probate.

To protect yourself from incapacitation, you should also draft a power of attorney for financial concerns and a living will.

What You Must Do Right Now

Unless you have a comprehensive living trust and have taken the proper precautions to move all of your other assets into shared assets and name a beneficiary for the remainder, the answer to the issue of whether your will may escape probate is no.

You must speak with an experienced estate and probate attorney to ensure that you are protected. For a free consultation, call us; we’d be happy to talk to you. We’ll be able to assist you in achieving your goals once we’ve reviewed your resources and environment.