What Assets Are Exempt From Probate in California?

Probate is the legal process of settling the estate of a deceased person. It can be required by law if the value of the estate exceeds a certain dollar amount. Probate is also necessary when the deceased person passes without first creating a will. However, it can also occur even if a will was put in place, but the property owned is subject to probate. You might be wondering, “What assets are exempt from probate in California?” This is where a San Clemente estate planning attorney can help.

The process of probate can oftentimes feel overwhelming and is probably the last thing anyone wants to deal with after the death of a loved one. Hiring the right attorney can prove crucial for understanding all the elements of these legal proceedings. They can ensure that the estate is settled efficiently, with no disputes arising between heirs.

What Is Probate, and How Long Can It Take?

Probate can be a complex and time-consuming process, both for the executor of the estate and those benefiting from it. The process involves:

• Filing a will in court, if there is one
• Identifying and then notifying all heirs
• Handling all the debts and taxes that come with the estate, which need to be paid

If the deceased left behind considerable assets or real estate, this process can be extremely lengthy. An estate executor must adhere to several steps:

• Filing a petition with the courts
• Providing notice of the death to all creditors and beneficiaries
• Collecting all necessary information about all assets owned by the estate
• Filing any tax returns
• Paying off debts
• Distributing any assets left amongst the beneficiaries, in accordance with the will or the law if there is no will

There is no set timeframe for how long it can take an estate to go through the probate process. This is usually due to the number of complexities that are possible in each case.

Assets That Are Subject to Probate

Once you know which assets are exempt from probate in California, it is also useful to know which assets are subject to probate. With this information, one can head into the probate process with a wider understanding and confidence of the proceedings, along with a better chance for the whole process to go more smoothly and efficiently.

Assets that are subject to probate in California include:

• Art, jewelry, antiques, and collectibles
• Stocks and bonds
• Intellectual property
• Vehicles
• Personal property
• Real estate
• Bank accounts
• Life insurance proceeds (if no beneficiaries named are in the policy)

Assets That Are Exempt From Probate

Any assets that were owned in joint tenancy (a type of ownership where each owner has an undivided interest in the property) or held in a trust may be able to bypass the probate process. This can save time and money while maintaining privacy during the distribution of the assets. It can also sometimes make it quicker for the heirs to receive their inheritance.

Common assets that are exempt from probate in California include:

• Trusts: One way to avoid probate is by setting up a trust. When you transfer all your property into a living trust, you can ensure that that property is exempt from any court supervision when it comes time for distribution after the death of the trustor. A living trust can also outline all the specific details pertaining to this distribution, making sure that all heirs receive their inheritance in a reasonable timeframe.
• Life Insurance Policies: When a life insurance policy comes with a designated beneficiary, it can be exempt from probate. The money paid out from said policy can then be accessed quickly upon the trustor’s death.
• Payable-on-Death Accounts: The owner of a payable-on-death account can name one or more beneficiaries who will receive a certain balance of the account when the owner dies. This account carries the benefit of allowing people to keep their assets private and accessible without the need for time-consuming probate hearings. These funds may also be accessed quickly after the trustor’s passing.
• Retirement Accounts: When you name a beneficiary to any 401(k)s, IRAs, or other retirement accounts, their ownership transfers immediately upon death to the heir without the need for probate.
• Right to Survivorship: If you own a property with someone else and the right to survivorship has been established, if one of you dies, the survivor is allowed to keep the entire property without having to go through probate.

FAQs

Q: How Much Money Can You Have and Avoid Probate Court in California?

A: If your estate does not exceed the value of $166,250 in California, there are a few simplified procedures that you may be entitled to, which can help you avoid probate court. These procedures can include the establishment of a living trust, the use of life insurance proceeds, or the inheritance of retirement accounts.

Q: When Can You Avoid Probate Court in California?

A: In California, the easiest way that one can try to avoid probate is by establishing a revocable living trust. Virtually every asset owned (real estate, vehicles, bank accounts, etc.) can be placed into a revocable living trust. You will need to name someone as your trustee, who will handle all the details of the trust after your death.

Q: What Are Non-Probate Assets in California?

A: In California, common non-probate assets can include:

• Retirement accounts, like 401(k)s and IRAs
• Life insurance policies with specific beneficiaries
• Jointly owned properties that come with rights of survivorship
• Assets that are controlled via trust, rather than a will

Also included in non-probate assets are any assets that are not owned solely by the deceased individual.

Q: Do Bank Accounts Go Through Probate in California?

A: In the simplest terms, yes, all bank accounts that were owned by a deceased individual are subject to probate in California if the total value of the estate exceeds $166,250. However, if a bank account is placed into a revocable living trust, it may not be subject to probate court.

How the Estate Preservation Group Can Help

The probate process tends to come with its own emotional and mental stress. At the Estate Preservation Group, our team can assist you and guide you through every step of these legal proceedings. That way, you can relax and know with confidence that your family’s interests are being protected.

Contact us today and see how Paul V.L. Campo and the Estate Preservation Group can help you.