As you begin to consider the process of estate planning, you may feel overwhelmed with the options available and the ramifications of choosing each. One matter that may reoccur in your discussions with advisors is probate. While probate is a necessary process for one's estate, you are likely hearing advice about how to avoid it whenever possible.
If the issue that complicates your estate is real property, it may help you to understand how the ownership of that property affects its need for probate. Knowing this may help you make important decisions about how to prepare your real estate for probate.
Can I bypass probate?
Part of the probate process is verifying and valuating your assets and transferring them to your designated heirs. This is often a prolonged process, sometimes lasting a year or longer, which is why many people prefer to avoid it by using appropriate instruments of estate planning. The delay can often get expensive, as your estate may have to continue paying property taxes, utilities and upkeep on a property while the courts deal with probate issues.
In some cases, your property will automatically transfer to someone else, for example, under the following scenarios:
- You own property jointly with another person, and the deed grants rights of survivorship after your death.
- Your individually owned property has a payable-on-death or transfer-on-death designation, which allows the property to pass to your named beneficiary without the need for probate.
- You place ownership of your property in a revocable trust, which allows you to maintain control of it while you are alive and passes ownership to your successor trustee immediately after your death.
Using trusts is a common way to protect your loved ones from a drawn-out probate. Since the trust is legally the owner of the property, the property does not have to go through the probate process after your death. Otherwise, upon your death, the authority to distribute your belongings according to your will rests in the hands of a probate court with the assistance of your personal representative or estate executor.
Of course, if you do not have a will or trust, this adds another complication to the probate of your estate. The court will then determine who gets your property based on California's laws of succession. This is why it is especially important not to procrastinate making your estate plan if you have specific wishes for the distribution of your assets.