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Probate Avoidance Techniques

We can't ignore the fact that it can be extremely difficult to mourn the loss of a loved one. One factor that only increases the emotional toll is that those left behind will have to figure out how to transfer or inherit property from the person who died and this process begins relatively quickly after the death.

In order to accomplish this, you will usually have to go to court. This process of transferring title from the deceased to the beneficiaries or heirs with court supervision is called probate. Probate is the court monitored process of proving that a will is valid, taking care of the financial responsibilities of someone that died, transferring property to the heirs or beneficiaries and after paying off all debts against the estate, distributing the remaining assets among the beneficiaries designated in the will.

If there was no will, then after all claims are paid against the estate the remaining will be distributed among the rightful heirs under California's intestate succession laws. Intestate means "dying without a will."

A California probate case does involve fees, which are paid by the estate. The entire probate case can take anywhere from 9 months to 1 1/2 years, or even longer when there is a will contest or when real estate property has to be sold in order to pay off debts or distribute money among the beneficiaries. Since probate ties up assets for some time, it is not uncommon for our clients to want to utilize certain tools in order to avoid probate, or at the very least they want to use certain vehicles that allow them to convert "probate assets" into non-probate assets.

Probate assets are basically those that you own solely in your name. Those assets that you own jointly with someone else or assets that have a beneficiary designation that pass automatically to someone else when you die are not subject to probate. Assets that are placed into a trust are not subject to probate proceedings either.

Avoiding probate does not have to be a difficult process. Many of our clients use a few simple and effective strategies that ensure that some or all of their property passes directly to their heirs and without the need for going to probate court. Some of the effective ways to circumvent the probate process include:

While there are many valid reasons to avoid probate, there is no magic bullet to solve every financial problem that affects an estate. Avoiding probate cannot help you avoid paying taxes, especially since the two are completely unrelated. However, most people don't need to worry about federal estate taxes unless their estate is worth $5,250,000 as of 2013 and the state of California currently does not impose an estate tax.

Since California is a community property state, the general rule is that both spouses own whatever property they accumulated during the marriage. With each spouse having a half interest in the community property, you are free to leave your separate property as well as your half of community property to whomever you choose.

Avoiding probate doesn't allow you to avoid paying your creditors. If you don't leave enough assets to pay your taxes and debts, then any assets that passed outside of probate may be subject to creditors' claims after your death.

To learn more about probate avoidance techniques, contact Mary E. Mullin, Attorney at Law. As a Whittier probate attorney with years of experience, she can provide you with all the information you need to move forward in the right direction.