Probate Alternatives Lawyer: California Options to Avoid Probate

One of the most common misconceptions families face is the belief that probate is always necessary after someone dies. Employees at banks and financial institutions will often demand letters of administration or letters testamentary before they are willing to do anything. These are legal documents related to probate, and they often make people feel like probate is a must. The reality is, these bank employees did not go to law school. They often receive minimal training on probate procedures and defer simply to what they were told by their supervisors.

It might make their job easier if you went through probate, but it does not make yours. In reality, there are numerous strategies to avoid probate entirely, and many of them begin before death through proper estate planning.

Proactive planning tools include establishing living trusts, adding beneficiary designations on financial accounts (e.g., investment accounts, retirement accounts, etc.), using transfer-on-death (TOD) deeds for real property, and titling assets as joint tenancy with rights of survivorship. These strategies allow individuals to transfer assets directly to beneficiaries upon their death without probate court involvement.

However, even if a loved one did not put these planning strategies in place before passing away, there are still several valuable options available. The probate alternatives outlined below focus on what can be done after someone has already passed away, which are procedures that The Werner Law Firm regularly helps families navigate to avoid the time and expense of full probate proceedings.

Small Estate Affidavit

In cases where there isn’t a house, dealing with financial assets can be a little bit more straightforward. If the value of the estate is not worth more than $208,850, and there is no real property in the estate, then families may be able to take advantage of California's small estate procedures. For example, if a loved one had $100,000 in a bank account on which no beneficiary is named, and that was the only asset in the estate, our firm could prepare and have the heirs sign a Probate Code 13100 affidavit directing the bank to release the funds to the heirs. No formal probate case would need to be filed to get these funds.

Note that there are many different types of assets that do not count towards that $208,850 number (cars, mobile homes, joint accounts, accounts with beneficiaries, etc.), so it can sometimes become a complex analysis to see if an estate qualifies. If you have any questions on whether an estate may qualify, we would be happy to help with a free consultation.

Heggstad Petition Filing

Probate procedures are sometimes even required where a decedent created a trust. It is important, in creating a trust, to set it up and properly “fund” it by transferring property into the trust. If real property is not transferred into the trust's name, then the successor trustee will not control it. They will not sell it as it is likely still in the deceased individual’s name.

Sometimes, when property is not placed into the trust, we can file a Heggstad Petition (or California Probate Code 850 Petition), wherein we petition the court to recognize and put into the trust property that the decedent clearly intended to put into the trust. For example, the decedent may have listed a trust asset schedule in the back of the trust. Such a procedure is often much easier, quicker, and more cost-effective than going through probate.

Spousal Property Petition

Oftentimes, a Husband and Wife will own real property as joint tenants or tenants in common. If property is held in joint tenancy, the surviving party can file an affidavit of death of joint tenant with the county recorder’s office in order to transfer title into their name alone. However, if your spouse passes away and real property is held as tenants in common, then technically you only hold one-half of the property in your name, and you will be unable to sell the property or refinance without first putting it entirely in your own name.

As California is a Community Property state, real property acquired during the marriage with community property funds is typically considered community property. If the deceased spouse did not name an alternate beneficiary by way of will or trust for their share of the community property, then their share of the community property will pass naturally to the spouse by intestate succession. It would be tedious to have to go through a full-blown probate case simply to transfer such property into a spouse’s name, so a procedure was established (a spousal property petition) through which a spouse could petition the court to transfer such property into their name. Such a petition is much quicker and easier than probate.

It is typically easier to be successful in a Spousal Property Petition if the deceased spouse had a will leaving everything to their surviving spouse. If there is no will, we will have to demonstrate to the court that the asset we’re addressing is, in fact, community property.

The court may inquire as to facts regarding how the asset was purchased, if there was a down payment, where the down payment came from, etc. These are important issues, because if the property was acquired by the deceased spouse by gift, or inheritance, or purchased with funds the deceased spouse had prior to the marriage, then the property may be considered the spouse’s separate property.

Without a will, under California’s intestate succession laws, separate property is split between the surviving spouse and the deceased spouse’s blood relatives (children, parents, or siblings, etc.), and in such cases, a spousal property petition would not be viable to deal with the asset.