Movies have left many people with the impression that beneficiaries receive their inheritance as soon as the will is read. However, that is rarely the case because, when someone dies, their estate typically has to first go through probate.
What is probate, how long does it take and can it be avoided?
When is probate required?
Probate is the process of validating a will, paying any expenses and taxes and then distributing the remaining assets to the heirs and beneficiaries. If there is no will, California’s intestacy laws dictate how assets are distributed to surviving family members.
The probate process can sometimes take months or even years to complete, depending on the complexity of the estate. In addition, with court, attorney and executor fees, it can become costly and significantly reduce the estate’s value. Probate is required on estates with a gross value over $208,850.
Several types of assets can bypass probate, which can allow for a faster transfer of property. Here are some tips to consider if you want to avoid probate:
- Transfer your assets into a revocable trust, which you control during your lifetime. Upon your death, a trustee will distribute them according to your specifications.
- Assets such as real estate can be held in a joint tenancy with right of survivorship. This ensures that the property will automatically transfer to the surviving owner.
- Review your life insurance policies and retirement investments, such as your 401(k), to ensure they have up-to-date beneficiary designations. Those funds will bypass probate and go directly to the beneficiaries.
- Take advantage of payable-on-death and transfer-on-death designations for bank accounts.
California’s probate process can add unnecessary stress and delays for your loved ones when you pass away. Proactive estate planning can help them avoid it entirely, ensuring their financial security when they need it most. Discuss your needs with a legal professional who can provide a tailored solution that meets your unique goals.
