You maybe have heard about probate before. Oftentimes the term holds negative connotations. Many people want to avoid this process, but don’t fully know why. These bring up various questions, and it’s important to learn more about it early on. In doing so, you will know whether it’s necessary or not.
What is probate?
Probate is a legal process in which the court distributes your assets after you pass away. When someone doesn’t have a will, all their assets fall under the control of state law. The state then determines who receives your assets. In addition, they consider any debts.
While the California probate process is a valid last option, some individuals and families want to avoid it altogether. There are a few reasons why, which includes:
- Probate is expensive. Since probate happens in court,your loved ones will most likely need an attorney. In addition, the procedure is directed by an executor, who also receives fees that are pulled from your assets. Court fees, appraisal fees and all other expenses could result in thousands of dollars, which could have gone to your heirs instead.
- Probate is time-consuming. Anything that happens within court takes time. The probate procedure involves filling out documents and forms under court supervision. Moreover, transferring property to your heirs can take anywhere from six months to 2 years.
- Probate is court-controlled. Rather than you or your loved ones making important decisions, a judge determines how your assets are distributed. They decide which heirs your estate will go to just by browsing some documents.
How do you avoid probate?
Most people own both probate and non-probate assets. It’s possible that probate assets need to be transferred in court. Aside from that, there are still ways to ensure a majority of your assets avoid probate court, such as:
- Living trusts: A living trust protects various assets from probate, like real estate, bank accounts and vehicles. Similar to a will, you will name someone as a successor trustee, and then transfer ownership to yourself as an additional trustee. When you die, your successor trustee will then transfer those assets to your predetermined heirs.
- Joint ownership: In California, spouses may opt for either a joint tenancy or right of survivorship. These are both forms of joint ownership in which if one spouse passes, the surviving spouse inherits those assets. This option requires some extra paperwork, and include other aspects of estate planning. Since California is a community property state, additional steps are needed if you want to keep property separate.
Every individual and family has unique estate planning needs. Sometimes the probate process works for people, while others want more control of their assets. It’s important to explore different options when dealing with your financial future.