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Avoiding Probate in California

What is Probate?

When someone passes away, many times family and friends are left determining how to manage and distribute the person’s remaining assets, otherwise known as their estate. Depending on the size of the estate and the title in which assets are held, it is often necessary to open a probate case in the local superior court to administer and distribute an estate.

Probate is a court proceeding under which the court appoints and supervises a personal representative to gather one’s assets, settle any outstanding debts and expenses, and distribute any remainder of the person’s estate, regardless of whether there is a will in place or not. In the event the person left a will, the Court will appoint the executor of the will as the personal representative of the estate to distribute the estate in accordance with the person’s will. In the absence of a will, the Court will appoint an administrator as the personal representative of the estate, and the estate will be distributed in accordance with state law.

What Are Some Of The Disadvantages to Probate?

You may have heard you want to avoid probate, but are uncertain of the reasons why. Some of the disadvantages to the probate proceeding is that probate can be both lengthy and costly. Depending on the timing of the probate court and potential difficulties administrating and distributing the estate, the proceeding may take anywhere from approximately 9 months to nearly two years. There are required court fees and costs, appraisal fees, and statutory fees that both the executor and legal counsel are entitled to by California law, based on the size of the estate. Currently, the executor and legal counsel are each separately entitled to 4% of the first $100,000 in assets, 3% of the next $100,000, 2% of the next $800,000, and 1% of the next $15,000,000. While the executor or counsel may choose to discount these fees, their statutory fees are usually significant and a primary reason to avoid probate.

In addition to the exposure to costly fees and potential delay, the distribution of an estate through the probate proceeding also renders the matter public. As such, information such as the value of one’s assets, beneficiaries to the estate, and conditions for receipt of assets can be made publicly available.

What Are Common Ways to Avoid Probate?

In California, some of the common ways to attempt to avoid probate or to avoid a full probate include the following:

    • Gifting property, prior to the time of death
    • Placing Assets in Trust
    • Designating real property under title with a right of survivorship, such as through joint tenancy and community property with a right of survivorship.
    • Using a Spousal Property Petition
    • Creating Payable on Death (POD) accounts or beneficiaries for various accounts such as saving and checking accounts, certificates of deposit, life insurance and retirement accounts
    • Creating Transfer On Death securities registration for stocks and bonds
    • Creating Transfer on Death Registration for vehicles
    • Creating Multi-Party Accounts
    • Using the Small Estates law if one’s probate assets are $150,000 or less

Many of the options listed above implicate various tax consequences, potential exposure to joint account creditors, and other legal consequences. If you need assistance determining whether your estate may be subject to probate or how to avoid probate, we welcome you to contact the Law Office of Christine Padilla at 858.324.4296.

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