You may find the concept of probate to be confusing. You may even ask, “You mean my property does not just go straight to my heirs, as my will instructs?” Unfortunately, probate involves a lot more than simply distributing assets to heirs. Creditors and taxes need to be paid and assets and heirs must be located. It is a complicated process. However, there are ways to bypass probate in California.
Do these assets bypass probate?
Not all assets are subject to the probate process. Instead, they go straight to the beneficiary. Some examples of these assets include life insurance policies, retirement accounts including pensions and annuities, savings and checking accounts designated as “payable upon death” and assets in a living trust.
Depending on the circumstances, real estate can also bypass probate. For example, if you and your spouse own your home as joint tenants and your spouse is still alive, your home will go entirely to your spouse. Similarly, if your home has the explicit right of survivorship, your spouse will inherit the entire home without having to go through probate, as long as the home was community property.
Small estates bypass probate
If your estate is worth $166,250 or less, you may be able to avoid probate. There is a simplified process to pass down your assets. However, you cannot own real estate if you want to use this simplified process to avoid probate.
Assets you can include in the $166,250 amount include:
- Personal property
- Life insurance with no beneficiary
- Retirement benefits with no beneficiary
Assets you do not include in the $166,250 amount include:
- Motor vehicles
- Real property not located in California
- Anything in a trust
- Anything held in joint tenancy
- Assets that go directly to your surviving spouse
- Debts of the deceased
- Bank accounts owned by more than one person
There are other assets not counted in the $166,250 amount not listed here. The complete list can be found in California Probate Code.
As long as the countable assets equal $166,250 or less and 40 days have gone by since your death, your personal assets can be transferred to your heirs through an affidavit. These affidavits can be found in banks or from an attorney.
You may have options
If you have a small estate and meet all qualifications, you may be able to have your estate settled without having to go through probate. This can save your heirs time and money, and may help them grieve without the additional stress of probate. Through proper and effective estate planning you can make sure your assets are passed on to your heirs in the way you deem best.