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How to Avoid Probate Without a Living Trust - Werner Law Firm

How to Avoid Probate Without a Living Trust

Troy Werner and his family

Written by Troy Werner

Troy Werner has been an indispensable asset to The Werner Law Firm since joining in 2009, providing exceptional legal service to its clients.

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POSTED ON: October 4, 2022

When a person dies, their belongings distribute among the living. There is very little we can take with us into the afterlife – and most of what counts as a personal possession, especially property, must pass into another person's ownership. Probate laws determine this. Probate refers to the judicial process of administering a decedent's estate, […]

When a person dies, their belongings distribute among the living. There is very little we can take with us into the afterlife – and most of what counts as a personal possession, especially property, must pass into another person's ownership. Probate laws determine this.

Probate refers to the judicial process of administering a decedent's estate, usually by proving a final testament or "will." Without a will, a person is deemed intestate (without testament), and their estate goes to probate for distribution. The manner it's distributed is determined by state-specific intestacy laws and the intestacy succession.

Probate is crucial, with or without a testament, as it establishes the distribution of a person's belongings in death. But probate can also be lengthy, depending on your estate's size and scope. It can also be expensive, so individuals often go to great lengths to learn how to avoid probate.

If you own any property beyond the state lines of where you lived and died, you will need to widen the scope of your probate process even more. Each state requires you to open a secondary or ancillary probate process. For wealthier Americans with larger estates, dying intestate and leaving everything in the hands of the probate court can spell a bureaucratic nightmare for your descendants.

One of the most common ways of eliminating or minimizing the size of your estate available to avoid probate is through a living trust. But it is far from the only way. If you know what you are doing, you can learn how to avoid probate.

What is the Probate Process?

The probate process differs a little bit from state to state. Still, the core is the same everywhere in the United States – when a person dies, their respective executor – usually a loved one or their lawyer – must petition the local courts in their state of residence to begin probate through an official death certificate. You shouldn't necessarily jump to start the probate process; we will get to why later.

Once you and your family are ready to start probate, a court date will begin the process. In the initial setup, the court will choose an executor (usually the person who petitioned for probate, or if a will is present, the person named in the will as executor) and endow them with probate-specific powers. These powers include consolidating and managing the decedent's estate and the responsibility to notify the decedent's beneficiaries and creditors.

This is where probate begins to get complicated. Deadlines, dates, and time constraints limit the court's ability to expedite the process. There are critical periods for how long an estate must wait to allow creditors to respond to the probate announcement and file a claim before moving on to estate distribution.

Executor or Estate Representative Responsibilities

In addition to making public announcements and writing letters, the executor or representative of the estate must take care of the decedent's final personal and financial obligations. These responsibilities include:

  • Managing the final utility bills
  • Managing their last tax return
  • Calculating the gift tax
  • Seeking the services of an accredited and court-approved appraiser to tally the total value of the estate's contents at the date of the decedent's death
  • Managing estate tax obligations
  • Differentiating between assets named in the will and assets distributed before probate (even if they are still part of the will)

An estate can only be distributed once it has been fully inventoried and accounted for, all debts paid off, all obligations met, and all inconsistencies or conflicts addressed. Depending on the size of the estate, probate can last anywhere from six months to well over a year. Some states usually go faster – others take much longer.

Learn How to Avoid Probate

In addition to taking time and resources, probate can be costly. There are a lot of administrative and court fees to consider, as well as the legal costs of hiring a probate attorney. And if your estate is on the larger side, you will undoubtedly want that assistance.

However, one of the more significant reasons to consider trying to skip probate or find an alternative to probate isn't just a point of convenience but a matter of privacy. Because it takes place in a probate court, the probate process is a matter of public record, meaning that many of the details of your estate may be available to the public if you decide to let the probate court take care of everything.

This can be especially concerning if your family is relatively divisive and disagreements on what to do with your estate. Probate courts can often become the battlefields of extended sibling rivalries and inheritance disputes.

A neat, tidy, and expedited probate process is only possible through proper estate planning – with or without a living trust.

Alternatives to a Living Trust

There are ways to "remove" assets and properties from an estate before probate. Here are a few common examples:

  • Beneficiary designations or "Totten trusts" – also known as a payable on death clause or a transferable on death clause- allow you to name a direct heir for a specific vehicle, property, or account without the need to go through probate. A TOD or POD transfers the item directly into the ownership of the designated beneficiary at death. This works the same way as a life insurance policy payout or the remainder of a retirement account.
  • Right of survivorship – depending on your relationship with your beneficiary, you can transfer assets to them by having them be co-owners of your property with rights of survivorship before you die. You can sometimes do this without a massive gift tax – such as when transferring co-ownership to your spouse. In other cases, you may want to talk to a tax professional to ensure that your co-ownership plans won't result in a massive tax penalty.
  • A life estate is a specialized form of co-ownership where you effectively transfer property into a beneficiary's name before you die via a deed while reserving the right to live on the said property until you pass away.

Minimizing the size of your estate before beginning probate is the best way to "avoid it." This almost guarantees a hassle-free probate experience for the remainder of your estate, as long as your total value does not exceed the limit. Note that you will not be able to avoid initiating a probate process entirely – but you can expedite it, especially in states like California, through a small estate affidavit.

Why Not Rely on A Living Trust?

We will be the first to tell you that living trusts are excellent. They are an effective tool for managing your assets in the afterlife, shielding your loved ones from capital gains taxes, minimizing a creditor's impact on certain investment vehicles, or saving a spendthrift child from themselves. But they can be expensive and excessive to set up. Many estates are too small to justify creating a living trust – even a simple one.

You may still want to set up trusts whenever it makes sense, but these other options can be just as good for many estates and may be enough to bring your estate's value to the point where you can comfortably distribute it via probate court at a minimal cost.

Always Consult a Professional

Regardless of what you intend to do with your estate before you die, it's a mistake to try and wait too long. No one knows what tomorrow might bring, and an estate plan isn't something you should set and forget. But instead, it should be a series of decisions that change over time.

Always work with a professional when planning your estate, and consider a probate attorney when determining how to avoid probate. DIY wills and trusts can be riddled with clerical errors or may be too broad to fit your specific circumstances.

How to Avoid Probate Without a Living Trust - Werner Law Firm

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Founded in 1975 by L. Rob Werner and serving California for over 48 years, our dedicated attorneys are available for clients, friends, and family members to receive the legal help they need and deserve. You can trust in our experience and reputation to help navigate you through your unique legal matters.

Whether you need help creating a living trust or navigating probate, our living trust law firm's compassionate team of estate planning lawyers and probate lawyers are here to help you and ready to answer your questions.

Our goal is to make your case as easy as possible for you. Hiring a lawyer can be a daunting task, but it doesn’t have to be. From the moment you contact our firm, through the final resolution of your case, our goal is to make the process easy and understandable. We cannot change the fact that probate is a long and complicated process, but through our Werner Law Firm Difference, we strive to go out of our way to keep you informed of your case through every step of the way. We are constantly refining our processes and procedures for a more streamlined and calm client experience. Our goal is to have you feel like a burden was lifted from your shoulders, and that we made the whole process an easy one

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