Strategies For Avoiding Probate

In California, everybody can avoid probate. Probate is a long, public and expensive process. When a person dies without a properly designed estate plan, the task of estate administration and distributing assets falls to the probate court. The key to avoiding probate is careful attention to comprehensive estate planning. As your attorney, I can work closely with your accountant or financial adviser to determine what estate planning instruments are appropriate for your situation.

Methods For Avoiding Probate

Probate can be time-consuming and expensive. Therefore, at Michael A. Sawamura, Attorney at Law, I can put together the right strategy to help you avoid probate. Some such methods include:

• A clearly worded will that addresses your current situation. You should update your will in the event of marriage, divorce, the birth of a child or a change in the situation of an heir.
• Creation of trusts. Certain assets, including a home, savings and investments, transferred into living trusts (revocable or inter vivos trusts) do not pass through probate upon your death. Your lawyer can tell you whether your estate is large enough to benefit from creating a trust.
• Joint tenancy and retitling of assets. If you add your spouse or children to the title of your home and bank account as co-owners, the property avoids probate.
• Assets that have proper death beneficiary designations. This can include life insurance, IRAs, qualified retirement plans and some annuities to avoid the probate process as well.

Do Trusts Avoid Probate In Multiple States If You Own Property Outside California?

Yes. When you title out-of-state real estate in the name of your trust, your successor trustee can distribute that property without opening court proceedings in another state.

Without a trust, your family would need to go through ancillary probate. That is a separate court process required in each state where the deceased owned real property. A California revocable living trust can hold property across multiple states under one document and prevent this.

Take note that each out-of-state property still needs a new deed recorded under that state’s laws. A local attorney or title company in that state can guide you through this step.

Do You Need An Attorney To Avoid Probate, Or Can You Do It Yourself?

California law does not require you to hire an attorney. You can legally set up a living trust or name beneficiaries on your own. However, “do-it-yourself” estate planning can come with risks such as:

• Unfunded trusts: A living trust only avoids probate if you re-title your assets in the trust’s name. Skip this step, and those assets will still go through probate.
• Signing errors: Wills and trusts must follow California’s rules for signing and notarization. A mistake can invalidate the entire document.
• Unintended consequences: Strategies such as joint tenancy can trigger tax issues or expose your property to a co-owner’s creditors.

An estate planning lawyer can help you avoid these common pitfalls, as well as spot issues that are easy to overlook on your own. If your situation involves complex assets such as real property, a blended family or business interests, working with an attorney puts the right structure in place from the start.

Is It Too Late To Avoid Probate If Someone Already Died?

Not necessarily. It depends on how the deceased person’s assets were titled. You can skip probate if:

• The estate is small enough: Heirs can use a Small Estate Affidavit instead of going to court when the estate falls at or below California’s statutory threshold. This option becomes available once 40 days have passed since the date of death.
• The accounts have named beneficiaries: Life insurance, retirement accounts and payable-on-death accounts pass directly to the named person.
• The deceased owned the property jointly: The surviving co-owner automatically receives property held in joint tenancy without going through probate.
• The deceased held assets in a living trust: The successor trustee can distribute trust property directly to beneficiaries without court involvement.

You cannot create or change estate planning documents after someone has died. How the deceased titled their assets before death determines which options are available.

Understanding All Of Your Estate Planning Options

If you would like to discuss strategies for avoiding probate or have another question about my firm, please contact my office by calling 916-248-4465 or email my Sacramento, California, office to arrange for a consultation. As your lawyer, I will see that you clearly understand the implications of every element of your estate plan.