With a little careful planning, you may be able to avoid the probate question, or probate “problem,” all together. Avoiding probate saves money and greatly reduces the strain placed on your family by time in court. A meeting with an estate-planning attorney can help you figure out how to structure your estate so that probate is not necessary, no matter how large the value of the estate. The following is a list of estate-planning tools that can help you avoid having to go through the probate process.
- Living Trusts: Living trusts (also called an “inter vivos” trust) is a trust that is created while you are alive, rather than one created upon your death. Living trusts are great vehicles to avoid the lengthy and expensive probate process.
- Joint Tenancy: An asset that is owned by two or more people in joint tenancy is not required to go through probate. These assets are easily spotted because the joint tenancy is only created with the following specific language: “as joint tenants,” “in joint tenancy,” or with the initials “JT TEN,” or something similar. It has to be clear from the language that the ownership as joint tenants is what was contemplated. The benefit of joint tenancy is that when one of the joint tenants passes away, the other joint tenant(s) own the entirety of the asset. The language of the will of the deceased joint tenant becomes irrelevant and the property immediately moves into the other joint tenant’s possession.
- Small Estates: According to the California Probate Code, estates that are valued at less than $150,000.00 do not have to be probated. The assets that can be used to determine the value of the estate are limited so it is possible that the small estate law can be used even though the total value of the estate is greater than $150,000.00. Life insurance, pension accounts, living trusts, and joint tenancies are all assets that are not considered part of the estate. The value of the estate is determined as of the date of the decedent’s death.
- Spousal Property Petitions: If the decedent leaves a spouse behind after death, the spouse can submit something called a spousal property petition with the Court. The petition asks the court to change the ownership of assets from the decedent’s name to the name of the surviving spouse. In reality, it is a simplified version of probate, meaning that it is cheaper and takes much less time. These types of petitions are usually used when the decedent died intestate (without a will) and the spouse and the decedent owned property together, or when the spouse is the main beneficiary under the decedent’s will.
If you are deciding how to structure your estate so that you can avoid probate in California, it is important that you consult an attorney experienced in estate planning. California estate-planning attorney John Palley at Meissner, Joseph & Palley, Inc., is a Certified Specialist in Estate Planning, Trust, and Probate Law. His office will be happy to assist you with any of your estate planning needs. Call today at 1-888-920-5983.