At its simplest, probate can be a complicated process to navigate. It can become an even more challenging ordeal when further complexities arise, like conflicts regarding the executor or administrator or someone being upset about how the will distributes the estate. There may also be complex challenges around paying debts, selling assets, and even situations where there is no will. However, one of the more difficult parts of the process can often be understanding what assets are even subject to the probate process in the first place.

Probate vs. Non-Probate Assets

Probate is a process for managing the distribution of the assets of the deceased. It also involves notifying those who may have an interest in the assets, closing out outstanding debts, and paying estate taxes. If certain steps haven’t been taken to shield assets from probate, then most of a person’s assets will generally be subject to probate. The assets which must typically go through probate in California include:

• All the assets that are the deceased’s separate property, including property registered in their name alone, acquired outside of marriage, or inherited during the marriage
• One-half of the deceased’s community property, which is property held with their spouse and usually acquired during the marriage
• Any share of a property in which the deceased was a “tenant in common” with others

The assets in question could be all manner of things, from houses and vehicles to stocks and money in a bank account. It could even be an old collection of baseball cards or comic books. It’s all subject to probate unless it is a part of a class of items sheltered from probate. These include:

• Assets placed in a trust
• Retirement accounts that can transfer to a beneficiary
• Payable on death (POD) accounts
• Transfer on death (TOD) accounts
• Trustee accounts
• Life estates

Benefits of Avoiding Probate

At times, people may wish to avoid probate by creating something like a living trust. While a living trust may be a more expensive upfront cost, this can end up being a better option for large or complex estates. Generally, people looking for an option like this, while hoping to avoid probate, are doing so because probate can be a drawn-out, costly process, while a living trust can be executed more quickly. Probate is also a matter of public record, so those looking to guard their privacy may prefer the option of trust.

FAQs

Q: How Does the Probate Process Work in California?

A: The probate process can be a costly, lengthy, and public affair. It follows a structure set out by California law:

• If it is necessary for there to be a probate proceeding (meaning that the value of the probate-eligible assets exceeds $166,250), then someone will be named the executor of the will or administrator of the estate.
• That will be followed by court proceedings, public notifications, and notices sent out to those named in the will and heirs.
• The executor or administrator will take control of all the assets subject to probate.
• They will be responsible for using the assets to pay outstanding liabilities and debts.
• Certain assets may be sold with court approval.
• Taxes on the estate are paid.
• The estate can be distributed to beneficiaries and heirs.
• A final accounting is provided to the court, and the estate is concluded.

Q: What Are Non-Probate Assets?

A: Some assets are not subject to the process of probate. This can often be desirable for people, as the probate process can take longer, is more costly, and is also public, meaning that the assets and their distribution will be publicly known. For this reason, many people try to avoid probate with much of their estate. For that to be an option, the assets must fit into specific categories, including assets:

• Held in a living trust.
• Jointly owned with another person or persons.
• In an account where the deceased is named as the “trustee” for someone else.
• That are payable on death or transferable on death.
• Such as life insurance and IRA benefits with a named beneficiary.
• Passed on to the surviving spouse.
• Registered as “community property with right of survivorship” by a husband and wife.

Q: What Assets Are Subject to Probate?

A: Generally, assets that aren’t exempt from probate are subject to probate. California law does not require probate in cases where the total value of the probate-eligible assets does not exceed $166,250. However, if the value does exceed that limit, then some of the assets that will be subject to the probate process include:

• Those assets which are in the deceased’s name alone
• Half of each asset owned as community property with the deceased’s spouse
• The deceased’s share of any asset that is owned with others in common as tenants
• Personal property that may not be registered in the deceased’s name but are their property

Q: What Is a Living Trust?

A: A living trust is an effective means of handling complex, large estates in a way that can avoid probate. Assets are placed in the trust, and there are legal instructions as to how those things will be distributed to beneficiaries upon death. The trust will name a trustee, who is responsible for overseeing the distribution. The assets may still be managed by the owner, even while in the trust, before their death. What makes it a living trust is that it can be changed and altered if desired.

Make Sure That Your Estate Is Executed According to Your Desires

At Sweeney Probate Law, we help people through probate. The process can be difficult to navigate, but we try to make it as simple and painless as possible. Probate can sometimes be contentious, and already fragile emotions can run hot. Working with a lawyer can be one way of keeping things from getting out of control. Our probate attorney can help ensure that the executor or administrator follows protocols as quickly and efficiently as possible while adhering to what has been laid out in a will. If you need probate help, contact our office today.