What is Probate?
Probate occurs when a person who dies leaves assets such as bank accounts, real estate investments, and other financial holdings in their estate and wants them to be distributed according to their will—usually without a will. Is appointed the executor (or administrator in the absence of a will) of the process.
Probate can occur with or without a will and is the process of distributing assets to family and friends. Since it is a legal process, probate can take a long time if there is no will – especially with assets of great value that require even more review.
Orange County offers many probate attorneys willing to assist in almost every area. They will guide you through the legal processes associated with probate and make sure everything is completed legally. There are many to choose from!
This article will help you learn more about probate. It will help you learn more about the process and how to avoid it. If you need more information, you can do more research.
Ways to Avoid Probate
1. Start an Estate Plan – Starting an estate plan begins with three steps. Step one is identifying the assets that you have. Step two is deciding who gets those assets. Step three is deciding how to transfer those assets to beneficiaries after you die.
Estate planning documents are the will, living trusts, durable power of attorney for finances, and advance health care directives. If you have retirement accounts or insurance your estate plan must also distribute those. You must make sure that you have named the correct beneficiaries on all your accounts and policies.
2. What is Probate? In California, if you die with more than $166, 250, you need to go through probate: https://www.orangecountyestateplanningattorney.com/blog/10-things-all-californians-should-understand-about-estate-planning/. This is a judicial process that is made to distribute a person’s assets after their death. A judge will supervise the settling of the case.
It goes through several steps, step one is filing a petition in the court. Then you must send notices to heirs and creditors. Next, you must prove the will if that is necessary.
After that, you must make collection of the estate’s property. You will then need to pay valid creditor claims and pay necessary taxes. The estate will then be closed when everything is completed.
3. What Passes Through Probate? You must determine what goes through probate and what doesn’t. Most of your assets will go through probate, but not all of them. Things that go through probate are cash in bank accounts, real estate that is not joint tenancy, investment accounts such as stocks and bonds, sole proprietorships, and household property. Things that won’t go through are joint tenancy properties, life insurance or annuities, payable on death accounts, retirement accounts, transfer on death accounts, and transfer on death deeds.
4. Reasons to Avoid – There are many reasons to avoid probate, the biggest of which is the expense. The cost of probate is determined by the value of the estate. The fees go to the attorneys that are doing the case. These fees are the maximums that are set by statute in the state of California.
The court gives your property values that are fair market value. This would be the price someone would pay on the open market. You need to remember that your assets are only those listed above.
Another reason people want to avoid this is because of the lack of privacy. Not many people want their life and death made a public record. They would prefer that all this be kept in the family.
5. Can You Avoid It? You can avoid it by not having more than $166, 250 in assets. If you have assets larger than that, you can put them in a living trust to avoid probate. You can also make sure that non-probate assets have the proper beneficiary designations. Doing this will allow you to avoid it.
You can do this by yourself or hire an attorney to do this for you. It requires a lot of legwork to get it done, so it might be easier to hire a lawyer. It can also save you headaches trying to figure everything out.
6. Can a Will be Enough? This depends on many things, as you may have guessed. You can have a comprehensive estate plan, or you could have a will. You can use a will without a living will if you have minor children and want to establish guardianship for them, if you don’t own a home, you don’t want a living trust or can’t afford one, you’re not worried about the cost of probate, or you need a judge to help because you have complex issues with creditors.
Having a will is a good start to financial estate planning. It is good for a new family starting out with a newborn. You may need more than that if you have more assets.
7. Living Trusts – You might need a living trust if you have assets totaling more than $166, 250. Read more about living trusts here. In California, this is not a public document. You can customize a living will to fit the needs of your family.
You might also need a living trust if you own a home, own a very large estate, are in a second or third marriage, or have a child with special needs. A living trust can benefit you in these cases. You can designate who you want to inherit these things from you.
8. Create a Personal Inventory – You will need to get some essential information together no matter if you choose a will or a living trust. You will need a list of all your personal assets and personal property. Determining this will help you to choose the right option.
If you don’t have enough assets to go above the limit, a will would be best for you. If you have assets that go above the limit, you will want to do a living trust. You need to choose which is best for you.
Conclusion
There are many things that you need to know about living trusts and wills and other financial estate planning. These things can help you to avoid probate and save you some money. You can also choose the right option for your family.
