California has numerous expedited procedures for distributing small estates. These procedures can be quite useful for quickly and efficiently dealing with small estates if certain requirements are met.
One procedure (Probate Code section 13100) applies to estates which consist of less than $100,000 in assets (including real estate assets) which must be probated. (Note that the $100,000 figure does not include assets transferred through Joint Tenancy, in trust, in pay on death accounts, or by other non-probate methods; this means that this procedure can be applied to a very large estate as long as the estate only has $100,000 in assets which need to be probated.) Although this procedure expedites the distribution of the probate estate, it cannot be used to distribute real property. This procedure allows you (beneficiaries or heirs) to collect and distribute the decedent's personal property to the decedent's beneficiaries (if there is a will) or heirs (if there is no will) simply by presenting a declaration to the court.
Probate Code section 13151 also applies to estates (or portions of estates) which consist of less than $100,000 in assets, and provides for the court to issue an order which clears title to either real property or to real property and personal property (but not solely personal property). Such an order can be utilized to determine that a person (a beneficiary or heir) has succeeded to a decedent's real property, or real and personal property, as the case may be.
These procedures can be very helpful in expediting the distribution of a small estate (or a large estate with a small amount of assets which need to be probated), but they must be used with care because there are many requirements which must be met in order to utilize them.
Showing posts with label Probate. Show all posts
Showing posts with label Probate. Show all posts
Monday, November 24, 2008
Monday, October 27, 2008
How to Avoid Probate?
Probate is a complex procedure which requires lots of time, effort, and worst of all, is very expensive. Because of the expense, time, and hassle involved, it should be avoided if possible.
One simple way to avoid probate is to set up a living trust. Assets in a living trust do not have to be probated. This makes living trusts the perfect vehicle for avoiding the cost and hassle of probate.
Another way to avoid probate is to title assets in joint tenancy. Assets titled as joint tenancy avoid probate because when one owner of joint tenancy property dies, his or her interest in the property automatically vests in the surviving owner(s). So, if two people own property as joint tenants, if one of them dies, the other automatically becomes the sole owner (without having to go through probate). There are some drawbacks to owning property in joint tenancy, so please contact us if you are considering titling an asset in joint tenancy. (For example, the property will not avoid probate on the death of the surviving joint tenant; in addition, there are tax basis consequences to owning property in joint tenancy, which can have a negative tax impact on the surviving joint tenant.)
The same holds true for California property titled as community property with right of survivorship. The surviving spouse will automatically become the sole owner of the property upon the death of the first spouse.
One easy way to avoid probate for bank accounts is to hold them as "payable on death" (P.O.D.) accounts. These accounts have the benefit of being paid automatically on death to a named beneficiary. These accounts can be set up through your local bank. One common question we get regarding P.O.D accounts is whether the named beneficiary has any right to funds in the account prior to the death of the primary account holder. The answer to this is no. The beneficiary has no right to the funds prior to the death of the primary account holder, and the beneficiary can be changed or eliminated by the primary account holder prior to death.
Another way to avoid probate through beneficiary designation involves retirement accounts and pension plans. Retirement accounts such as IRAs or 401(k) accounts go directly to a named beneficiary or beneficiaries at death. This will avoid the necessity of going through probate, as the beneficiary can simply claim the plan benefits from the account custodian.
Two other ways to avoid probate in California are: 1) for estates which have less than $100,000 in probate assets, and 2) for estates where a spousal property petition can be utilized. Smaller estates, which have less than $100,000 in probate assets (the estate can be much larger than $100,000, but the probate assets must not exceed $100,000) can go through a summary procedure where affidavits are utilized to transfer assets.
For estates where a spouse, or registered domestic partner, is to receive assets outright, a spousal property petition can be used to transfer assets. When using this procedure, there is no limit as to the amount of assets which can be transferred. The assets to be transferred must pass by either will or intestate succession (where there is no will, but California laws mandate that the assets are to be transferred to the spouse or domestic partner). Additionally, part of an estate can be transferred utilizing a spousal property petition even if other assets must still be probated.
In sum, there are numerous ways to avoid probate under California law. Please contact us if you have any questions regarding California probate law or ways to avoid probate in California.
One simple way to avoid probate is to set up a living trust. Assets in a living trust do not have to be probated. This makes living trusts the perfect vehicle for avoiding the cost and hassle of probate.
Another way to avoid probate is to title assets in joint tenancy. Assets titled as joint tenancy avoid probate because when one owner of joint tenancy property dies, his or her interest in the property automatically vests in the surviving owner(s). So, if two people own property as joint tenants, if one of them dies, the other automatically becomes the sole owner (without having to go through probate). There are some drawbacks to owning property in joint tenancy, so please contact us if you are considering titling an asset in joint tenancy. (For example, the property will not avoid probate on the death of the surviving joint tenant; in addition, there are tax basis consequences to owning property in joint tenancy, which can have a negative tax impact on the surviving joint tenant.)
The same holds true for California property titled as community property with right of survivorship. The surviving spouse will automatically become the sole owner of the property upon the death of the first spouse.
One easy way to avoid probate for bank accounts is to hold them as "payable on death" (P.O.D.) accounts. These accounts have the benefit of being paid automatically on death to a named beneficiary. These accounts can be set up through your local bank. One common question we get regarding P.O.D accounts is whether the named beneficiary has any right to funds in the account prior to the death of the primary account holder. The answer to this is no. The beneficiary has no right to the funds prior to the death of the primary account holder, and the beneficiary can be changed or eliminated by the primary account holder prior to death.
Another way to avoid probate through beneficiary designation involves retirement accounts and pension plans. Retirement accounts such as IRAs or 401(k) accounts go directly to a named beneficiary or beneficiaries at death. This will avoid the necessity of going through probate, as the beneficiary can simply claim the plan benefits from the account custodian.
Two other ways to avoid probate in California are: 1) for estates which have less than $100,000 in probate assets, and 2) for estates where a spousal property petition can be utilized. Smaller estates, which have less than $100,000 in probate assets (the estate can be much larger than $100,000, but the probate assets must not exceed $100,000) can go through a summary procedure where affidavits are utilized to transfer assets.
For estates where a spouse, or registered domestic partner, is to receive assets outright, a spousal property petition can be used to transfer assets. When using this procedure, there is no limit as to the amount of assets which can be transferred. The assets to be transferred must pass by either will or intestate succession (where there is no will, but California laws mandate that the assets are to be transferred to the spouse or domestic partner). Additionally, part of an estate can be transferred utilizing a spousal property petition even if other assets must still be probated.
In sum, there are numerous ways to avoid probate under California law. Please contact us if you have any questions regarding California probate law or ways to avoid probate in California.
Subscribe to:
Posts (Atom)
