Probate Process in California: Alternatives & Shortcuts - Werner Law Firm
Alternatives and Shortcuts to the Probate Process in California - Werner Law Firm

Alternatives and Shortcuts to the Probate Process in California

The probate process can be a lengthy and expensive affair for certain estates, especially after they have reached a specific scope and level of complexity. But it is not always necessary, and there are ways to shorten and even avoid probate. Careful estate planning tools can serve as an alternative option to California probate and help even the most complex estates reduce the financial burden and time-sink. Most smaller estates can even skip the process altogether – if they are prepared.

What Is the Probate Process in California?

The probate process begins in the first few days after a person dies, through an official petition, usually by a relative. The petition is started with the decedent’s death certificate. It requires the petitioner to come forth with any relevant copies of the will and other estate planning documents about the decedent’s assets and property.

Anything that isn’t automatically transferred upon a person’s death – such as a vehicle or home with a direct beneficiary on the title, property owned under joint tenancy, community property, etc. – must theoretically go through the probate process to be properly distributed to the right relatives and descendants.

If the decedent left a last will and testament, then one of the first probate steps is to legitimize the will and name an executor. The executor will be responsible for fulfilling the will’s contents, and they will be given special privileges to handle the decedent’s estate through the probate court.

One of their first tasks is to create a public notice regarding the decedent’s death, to notify creditors who might have debts to settle with the estate. Part of the probate process’s length comes from creditors’ mandatory period to claim the estate before taxing and distributing the surviving beneficiaries.

In the absence of a will, the probate process plays an important role in overseeing the distribution of a decedent’s estate as per local intestate laws. Once creditors are satisfied and the estate has been evaluated and taxed, it must be distributed as per the will.

Why Avoid Probate in California?

In its entirety, this process can take months at best and well over a year in most cases. Associated attorney fees can be quite high in certain states, and administrative costs for executors’ tasks can also run up a significant bill. Most importantly, probate can be significantly delayed by complicated assets, from certain financial instruments to property held in different states or countries.

There are also significant tax considerations, especially for larger estates. The probate process is also entirely a matter of public record, which means the decedent’s will and their estate contents will be accessible through county records by anyone who wishes to access them.

For those seeking privacy, especially in financial matters, certain assets and property should not be passed through probate. At a certain point, it is impossible to evade the probate process entirely. But it can be sped up for certain cases, and select assets can skip probate entirely.

Skipping Probate with a Small Estate

In California, estates with a total value under a specific limit have the option of an expedited probate process that skips through most of the tedium and cuts the entire ordeal down to a few weeks. However, this process is exclusive to small estates – with a total value of at most $166,250, not including certain exclusions, such as:

      • Remaining salaries up to a total of $16,625.
      • Registered motor vehicles.
      • Property and assets already excluded from probate.
      • Property outside of California.

To begin this expedited process, the beneficiary must launch the county’s request, obtain consent from the estate’s would-be executor, get a detailed inventory and appraisal of the estate to confirm its value, and start the process before a probate case has been opened.

Transferring Property Through Beneficiary Designations

The estate’s size pushed through probate can be reduced by simply designating beneficiaries to certain assets and property, including (but limited to):

You can do the same with so-called Totten trusts or transfer-on-death (TOD) designations for select vehicles and properties, should you pass away. This lets you reduce the estate’s size before the probate process begins, as these assets are automatically distributed to their respective beneficiaries before probate (they may potentially still be subject to an estate tax if the total value of the estate exceeds the lifetime estate tax exemption limit).

Reducing Probatable Assets Through Trusts

A living trust is another viable way to reduce your estate’s size before probate. Certain trusts can even be written to reduce or eliminate federal estate taxes (with certain caveats). A trust is an entity created by a trust document that holds assets and property funded into it by the trustor or grantor for a set of (or a single) beneficiaries.

Assets and property funded into a trust must be amended to reflect that they are now the trust’s property through deeds and other ownership documents. Revocable living trusts let the grantor exercise more control over their assets and property. In contrast, irrevocable living trusts often require greater separation between a grantor and their property, with certain asset protection benefits.

When setting up a trust, you must also assign successor trustees to manage the trust’s contents and distribute them to your beneficiaries after death. This is a separate process from the probate process, and any assets held in a trust for a beneficiary’s sake will skip probate.

Through designated beneficiaries, reducing your estate’s size, and making the most of trusts, you can greatly diminish the California probate process’s cost and duration and save yourself a lot of time and money. However, these options do not always pay off for all estates.

It is always important to consult with a legal professional before considering a trust or other drastic estate planning measures. These also cost time and money to set up and manage, and while it is often worth it for larger estates, it may not be necessary for your specific needs and circumstances.

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