Probate serves an important purpose, but most families would prefer to avoid the time, expense, and court involvement that can come with the process. Fortunately, California residents have several estate planning options that can allow assets to pass directly to their loved ones without going through probate.
At Afati & Page, LLP, we help individuals and families throughout Orange County, California, create estate plans designed to protect their assets, carry out their wishes, and make things easier for their loved ones. While every situation is different, taking the right steps today can significantly reduce the likelihood that your family will need to navigate probate later.
If avoiding probate is one of your goals, understanding how probate works and which assets may be subject to it is an important place to start.
Why Do People Want to Avoid Probate?
Probate is the court supervised process for administering certain assets after someone dies. It may involve identifying and valuing assets, notifying creditors, paying debts and taxes, and ultimately distributing property to beneficiaries.
For a more detailed explanation of the process, our article What Is Probate? explains how probate works and when it may be necessary in California.
Families often want to avoid probate because the process can take time, involve legal and administrative expenses, and make certain information about the estate part of the public court record. Probate can also create additional responsibilities for family members at a time when they are already dealing with the loss of a loved one.
A well designed estate plan can often simplify the transfer of assets and reduce the amount of property that must pass through probate.
Create a Revocable Living Trust
For many California families, a revocable living trust is one of the most effective tools for avoiding probate.
A living trust allows you to transfer ownership of certain assets into the trust while continuing to control those assets during your lifetime. You typically serve as the trustee while you are alive and designate a successor trustee who can manage and distribute the trust assets after your death.
Because the trust owns the assets rather than you individually, properly funded trust assets generally do not need to pass through probate before they can be distributed to beneficiaries.
Creating the trust document alone, however, is not enough. Assets must actually be transferred into the trust when appropriate. This process is commonly referred to as “funding” the trust.
At Afati & Page, LLP, creating and properly funding a trust is an important part of helping clients build a comprehensive estate plan rather than simply preparing a collection of legal documents.
Use Beneficiary Designations Where Appropriate
Certain assets allow you to name a beneficiary who will receive the asset after your death. Because the beneficiary is designated directly on the account or policy, these assets can often transfer without probate.
Examples may include:
- Life insurance policies
- Retirement accounts
- Certain investment accounts
- Payable on death bank accounts
- Transfer on death accounts
Beneficiary designations should be reviewed periodically, particularly after major life changes such as marriage, divorce, the birth of a child, or the death of a beneficiary.
It is also important to coordinate beneficiary designations with the rest of your estate plan. An outdated beneficiary designation can override instructions contained elsewhere in your planning documents and result in assets being distributed differently than you intended.
Consider How Property Is Titled
How you own property can affect whether it must go through probate.
Certain forms of joint ownership allow property to transfer automatically to a surviving owner when one owner dies. This can sometimes be useful for spouses and other individuals who intentionally own property together.
However, adding another person to an account or property simply to avoid probate can create unintended legal, financial, or tax consequences. Ownership decisions should be considered as part of your overall estate planning strategy rather than handled independently.
Make Sure Your Trust Is Properly Funded
One of the most common estate planning mistakes is creating a living trust but failing to transfer assets into it.
For example, someone may establish a trust but leave real estate or other significant assets titled solely in their individual name. Depending on the circumstances, those assets may still require probate.
Estate planning should therefore include a careful review of how significant assets are owned and whether they have been properly coordinated with the trust.
It is also important to revisit your estate plan periodically. New property, investment accounts, business interests, and other assets acquired after your trust was created may need additional attention.
Does Having a Will Avoid Probate?
This is one of the most common misconceptions about estate planning.
A will does not automatically avoid probate. Instead, a will provides instructions about how probate assets should be distributed and can name the person you want to administer your estate.
If assets are held solely in your name and do not have another method of transferring at death, those assets may still need to go through probate even if you have a valid will.
Having a will is still an important part of many estate plans. However, individuals whose primary goal is avoiding probate often need additional planning tools, particularly a properly funded living trust.
Without appropriate planning, California law may determine who receives certain assets. Our article What Happens If I Die Without a Will in California? explains how California’s intestate succession laws can affect an estate when someone dies without a valid will.
What Happens After Someone With a Trust Dies?
Avoiding probate does not mean that nothing needs to happen after death.
When someone who created a trust passes away, the successor trustee typically assumes responsibility for administering the trust. This may include identifying trust assets, notifying beneficiaries, addressing debts and taxes, maintaining appropriate records, and distributing assets according to the terms of the trust.
Proper trust administration helps ensure these responsibilities are handled correctly and that the wishes contained in the trust are carried out.
While trust administration can involve important legal and financial responsibilities, it generally takes place outside the probate court when the estate plan and trust have been structured properly.
Estate Planning Is About More Than Avoiding Probate
Avoiding probate is an important goal for many families, but it should not be the only objective of an estate plan.
A comprehensive plan can also determine who receives your property, identify who should manage your affairs if you become incapacitated, provide instructions regarding health care decisions, protect minor children, and help reduce the potential for disagreements among family members.
Working with an experienced estate planning attorney in Orange County allows you to consider these issues together and develop a plan based on your family, assets, and long term goals.
Frequently Asked Questions
What is the best way to avoid probate in California?
For many individuals and families, a properly created and funded revocable living trust is one of the most effective tools for avoiding probate. Other strategies may include beneficiary designations and appropriate forms of property ownership.
Does a living trust completely avoid probate?
Assets that are properly transferred into a living trust generally avoid probate. However, assets left outside the trust may still be subject to probate depending on how they are owned and whether another transfer method applies.
Does a will avoid probate in California?
No. A will provides instructions for distributing probate assets, but having a will does not by itself prevent an estate from going through probate.
Do retirement accounts go through probate?
Retirement accounts with valid beneficiary designations generally pass directly to the named beneficiaries rather than through probate.
Does jointly owned property avoid probate?
Certain forms of joint ownership may allow property to transfer automatically to the surviving owner. The result depends on how ownership is structured, so property titling should be reviewed as part of an overall estate plan.
What happens if I create a trust but do not put my assets into it?
Creating a trust without properly funding it can leave assets outside the trust. Depending on how those assets are titled, they may still need to go through probate.
Should I update my estate plan after creating a trust?
Yes. Estate plans should be reviewed periodically and after significant changes involving your family, finances, property, or beneficiaries. Newly acquired assets may also need to be coordinated with your trust.
Do I need an attorney to avoid probate?
California provides several methods for transferring property outside probate, but determining the right combination depends on your individual circumstances. An estate planning attorney can help ensure your trust, beneficiary designations, property ownership, and other documents work together as intended.
Plan Today to Make Things Easier Tomorrow
Probate planning is ultimately about making the transfer of your assets easier for the people you care about. A properly structured estate plan can reduce court involvement, provide clear instructions, and give your family greater certainty during a difficult time.
At Afati & Page, LLP, we help individuals and families throughout Orange County, California, create personalized estate plans designed to protect their assets and their loved ones. Whether you are creating your first estate plan or reviewing an existing trust, Contact Us to schedule a consultation and discuss the strategies that may be appropriate for your family.
This article is provided for informational purposes only and should not be considered legal advice. Every estate and family situation is unique. If you have questions about probate, trusts, or estate planning, consult with an experienced attorney.
