There are many ways to avoid probate in California. Plus, some estate planning tools are so simple that you can implement them without having to hire an attorney! From transferring property into a living trust to designating a payment on death beneficiary, A People’s Choice can help you prepare your estate planning documents so your surviving beneficiaries will not have to file probate. Read on to learn about the top five most popular ways people in California avoid probate, and how A People’s Choice can help.
1. Living Trust
In California, you can create a living trust to avoid probate because a living trust can serve as an alternative to a last will and testament. A living trust places your real property and assets “in trust” which an appointed trustee manages for the beneficiaries.
Furthermore, you can create a living trust for almost any asset you own, including real estate, bank accounts, vehicles, and jewelry. Once you create a trust, you must transfer property into it and designate a trustee (you can appoint yourself while alive). Then, upon your death, the successor trustee will transfer the trust assets to the beneficiaries without having to go through the probate process.
2. Payment on Death Designation
You can use a payable on death (POD) designation to appoint a beneficiary of your bank accounts or certificates of deposits upon your death without probate. However, with a POD, the beneficiary will not have access to your assets while you are alive.
Note that we do not recommend naming a minor as a POD beneficiary, as this can be problematic when it’s time for the bank to release the funds. In such a case, the guardians may have to go to court and ask to be appointed as the minor’s guardians of the money before the bank will disperse it.
People often name POD beneficiaries for several types of property, including but not limited to:
- Bank accounts;
- Stocks and bonds; and
- U.S. savings bonds
It is important to keep in mind that if the POD beneficiary dies before the account holder, the account holder should immediately update the beneficiary on the account. Otherwise, the account may have to be probated.
3. Transfer on Death Deed
Transfer on death (TOD) deeds, often called beneficiary deeds, transfer real property to a beneficiary upon the owner’s death. However, like POD deeds, the designated beneficiary has no rights until death, and the TOD deed can be revoked prior to death.
For example, a vehicle transfer on death registration can be used to avoid the probate of vehicles in California. If you register your vehicle as a vehicle TOD, the named beneficiary will automatically inherit the vehicle after your death.
Learn more about California’s new transfer on death deed in this article.
4. Joint Tenancy Ownership of Property
There are many ways to hold title to real property in California. Specifically, holding property as joint tenants can be used to avoid probate. When an individual owns property as a joint tenant with right of survivorship, the surviving owner will automatically own the property when the other owner dies. No probate is necessary!
Likewise, community property with right of survivorship is another form of tenancy that can be used to transfer property acquired during marriage to the surviving spouse. Again, no probate is necessary for the property to transfer.
5. Small Estate Probate Procedures
Depending on the nature of your personal estate, you may be able to use California’s “small estate” probate procedures to have your property distributed amongst your beneficiaries. The gross value of the decedent’s real and personal property cannot exceed $166,250 to use such procedures.
Contact A People’s Choice for more information about avoiding probate in California. Ultimately, we always recommend proper estate planning to avoid probate. Luckily, estate planning doesn’t need to cost thousands of dollars – and you don’t need to hire an attorney for this very routine process. We can help you prepare your estate planning documents at a reasonable fee. Call us at 800-747-2780 and learn how we can help you!