Alternatives to Probate

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The purpose of probate is to publicly distribute the assets of an estate upon the death of the owner. This includes paying all taxes and outstanding debts due as well as distributing assets to legal heirs. When there is a will, the wishes of the decedent are taken into consideration and where possible, the terms of the will are considered for distribution.

The existence of a will triggers probate when the will is filed with the court in California. However, there are circumstances where the probate process can be avoided or streamlined considerably. I am an Oakland probate lawyer who has been handling this process for over 20 years, so let me explain your alternatives to you.

These are a few main alternatives to probate:

Assets Held in Trust

When property is transferred to a trust and administered by a trustee, those assets do not become part of the estate and are protected from the probate process. When the trust maker dies, the trust has a named successor, and this person now controls the trust. Provisions of the trust, such as disbursing assets to beneficiaries, are handled outside the probate process.

Note that when there is substantial property not held in trust, that portion of the estate may still have to go through probate.

Assets Subject to Contract Provisions

Typically, a life insurance policy that pays on death would be outside of probate, because the contract stipulates what happens. This same mechanism is in play for other assets where a death is written in as part of the contract. In effect, the deceased person has made an agreement about ownership that takes effect after they die. The terms of the contract transfer the asset directly. Other instruments that are commonly drawn up this way are IRA disbursements or retirement benefits.

Securities with a Pay-on-Death Provision

A pay-on-death provision can be attached to ME Savings Bonds and other financial instruments. If a security (stock or bond) is registered to transfer to someone upon the death of the current owner, the instrument doesn't have to go through probate. These can include:

  • Brokerage accounts
  • Mutual and other funds
  • Stocks and bonds

Joint Ownership

Common for property, but possible with other assets, a joint ownership (joint tenancy) can have the "right of survivorship" built in. This means that when one party dies, the other owns the asset in total. Joint tenancy is different than tenancy in common. In the former, which doesn't have to be probated, the entire asset is owned by each party. In the second (tenancy in common) ownership is split between the parties - whatever portion the deceased owned becomes part of the estate and subject to probate.

Besides property, another common use of joint ownership is a bank account in both parties' names with right of survivorship passing to the surviving person.

Other Considerations

A full probate can take months, even when there are no problems. For this reason, it is advantageous to use an expedited procedure when possible. While still considered probate, doing this avoids the formal process and the long wait.

One way an Oakland probate attorney would recommend in expediting the procedure is with a small estate declaration. When someone dies without owning any real property (real estate) and with assets totaling less than $100,000, a declaration attesting to these facts can be filed. This is called a "declaration," or the Section 13100 procedure. The section referenced is to the California Probate Code.

It still takes a minimum of 40 days, but is much faster than a full probate proceeding. If there is a single heir who is a surviving spouse or domestic partner, they can file a petition to avoid probate and claim all the assets, avoiding a full probate. When the dollar value of the deceased real property is less than $20,000, beneficiaries can file to avoid full probate.

If you're interested in avoiding probate and potentially exercising alternatives to probate such as having assets held in trust, please contact me. I am an Alameda County probate lawyer who cares.

Contact the Law Office of Steven M. Simrin

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