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Probate Alternatives in California: You May Have Options

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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: July 11, 2019

While not the most complex in the country, California's probate process can be both frustrating and long-winded for many concerned with finding the best possible way to pass on their wealth to the next generation. Luckily, multiple California probate alternatives ease the process. Probate occurs when a person dies, and a court is called to […]

While not the most complex in the country, California's probate process can be both frustrating and long-winded for many concerned with finding the best possible way to pass on their wealth to the next generation. Luckily, multiple California probate alternatives ease the process. Probate occurs when a person dies, and a court is called to determine what to do with the deceased’s belongings.

In some cases, assets that are exempt from probate pass directly to predetermined beneficiaries. Other assets pass through probate, where a will is presented, proven, and executed by someone appointed by the court (and the will). Without a last will and testament, or other forms of estate planning, a person is considered to have died intestate, causing their belongings to be automatically distributed to the next of kin as per California’s probate code.

Although estate planning is often seen as an exclusive tool for the rich and elderly, anyone with any form of wealth or property to their name should consider how what they own will transfer over to their loved ones in the unfortunate event that something unexpected might cut life short. If you own a home, a vehicle, a business, or otherwise possess wealth that outweighs any potential or existing debts, then it’s a sensible decision to think about how to prepare for a transfer of assets when you pass away.

While estate planning decisions can be difficult to prepare, they are not difficult to amend or reverse. Experts suggest preparing an estate plan when you begin to accrue wealth, start a family, and then go over your estate plan every five years or so/whenever a major change occurs in the family (death, birth, marriage, divorce, etc.). Depending on your estate's size, it could very well be worth your time considering an estate plan.

What’s Wrong With Probate?

The probate process is inconsequential for a large portion of Americans, but many stand to have much to lose should the entirety of their estate pass through the probate process. While proving a will and overseeing the process of distributing a decedent’s assets seems like a simple two-step process, the average length of a probate case tends to be close to a full year, costing families thousands of dollars in legal fees, as well as a sizeable headache.

While it might seem more expensive at first to seek legal help to bypass probate, it’s often more financially sound to utilize estate planning to minimize the assets going through probate than to wait for a sizeable estate to go through the entire process. A few California probate alternatives include the following.

Small Estate Probate Transfer

Any estate with a total value at or under $150,000 is typically exempt from much of the probate process instead of going through an expedited version of the process, often saving families both time and money. This ensures that decedents with smaller estates don’t have to invest in further simplifying the process, so their family can enjoy the fruits of their labor.

However, many larger estates can reduce the portion of their estate made to go through probate down to $150,000, creating the opportunity to take advantage of this expedited process. At the cost of utilizing other estate planning tools to take care of the rest of the estate, a decedent’s remaining wealth can pass through to their kin without going through the entire probate process.

Payable-on-Death (POD) and Transfer-on-Death (TOD)

One of the simplest California probate alternatives is to assign beneficiaries to property and certain accounts that allow transfer-on-death/payable-on-death clauses. The rules differ from state to state, and not all assets or accounts can be passed directly onto a beneficiary.

However, with a little extra paperwork, you can ensure that certain property forms and your bank accounts are transferred to your kin. A POD account does not transfer the rights of the account over to the beneficiary. Instead, it transfers the contents of the account over to the beneficiary. If multiple beneficiaries are named, they get an equal share.

Most institutions may also reserve the right to avoid transferring wealth to an individual if evidence of a dispute exists, complicating the matter. Although not the most surefire way to transfer wealth or assets, POD and TOD clauses are optional. A more comprehensive option would be to utilize a living trust.

Utilizing Trusts 

Trusts are documents that essentially transfer ownership over accounts and assets from an individual to a trusted entity, to be paid out to specific beneficiaries ultimately. There are typically three human elements to a living trust: the grantor, the trustee, and the beneficiaries.

      • The grantor is the person transferring ownership over their accounts and assets to the trust.
      • The trustee is an individual responsible for distributing the trust should the grantor pass away/under specified circumstances.
      • The beneficiaries are to whom the trust’s contents are given.

Different trusts come with different rules, and these documents can be designed to serve many purposes. Some can be used to protect assets from creditors, while others can be designed to distribute wealth among various charities. A trust can also be used to ensure that an adult relative is given financial aid well into the future, for years to come, rather than via a single large sum. Some trusts are more complex and expensive than others.

What Is a California Heggstad Petition?

For a trust to typically be completed, a person must not only fully list the contents of the trust within the trust document, but they must also amend any ownership documents about the assets they have transferred to their trust to reflect this change in ownership.

However, it’s not uncommon for some decedents to either forget or not have the time to finish funding their trust with the assets listed in it. In some cases, a petition may be filed to complete this process even after the trust’s grantor has passed away. This petition is called a Heggstad petition in California.

Other reasons one might file for a Heggstad petition include flawed paperwork, untimely death in the middle of the asset transfer, or any other combination of issues resulting in an asset being incompletely or improperly transferred. The precedent for this originates in a blunder by a certain Mr. Heggstad, who failed to finalize his home's transfer to his trust before death.

A court then decided that the home’s listing in the trust was enough to complete the transfer. If you believe your loved one made an error during the process of creating a trust and could not manage to fund certain assets into that trust, consider contacting an estate planning professional to discuss the viability of filing a Heggstad petition or otherwise salvaging the situation before the property goes through a lengthy probate process.

Estate planning is first and foremost determined entirely by the size and contents of an estate, and no two plans are identical. Some individuals benefit more from one method than another, and some estates are small enough to bypass much of the probate process, saving many Americans a sizeable headache. However, there is more to estate planning than simply utilizing the provided California probate alternatives.

An estate plan can help someone make choices about their healthcare and medical treatment or transfer power over their finances to a trusted family member in the event of incapacitation. An estate plan can also be used to determine who takes care of any underage offspring in the case of an untimely death, and it can be used to ensure the quality of life for a beloved pet left behind.


Common Questions About Probate


What is probate?

Probate is a legal process that takes place after someone dies. It includes: Proving in court that a deceased person's will is valid (usually a routine matter), identifying and inventorying the deceased person's property, having the property appraised, paying debts and taxes, and distributing the remaining property as the will (or state law, if there's no will) directs.


How does the probate process work?

Probate usually works like this: After your death, the person you named in your will as executor -- or, if you die without a will, the person appointed by a judge -- files papers in the local probate court. The executor proves the validity of your will and presents the court with lists of your property, your debts, and who is to inherit what you've left. Then, relatives and creditors are officially notified of your death. Your executor must find, secure, and manage your assets during the probate process, which commonly takes a few months to a year. Depending on the contents of your will and on the number of your debts, the executor may have to decide whether or not to sell your real estate, securities, or other property. For example, if your will makes several cash bequests, but your estate consists mostly of valuable artwork, your collection might have to be appraised and sold to produce cash. Or, if you have many outstanding debts, your executor might have to sell some of your property to pay them.


Does all property have to go through probate when a person dies?

No. Most states allow a certain amount of property to pass free of probate or through a simplified probate procedure. In California, for example, you can pass up to $100,000 of property without probate, and there's a simple transfer procedure for any property left to a surviving spouse. Also, property that passes outside of your will -- say, through joint tenancy or a living trust -- is not subject to probate.


Who is responsible for handling probate?

In most circumstances, the executor named in the will takes this job. If there isn't any will or the will fails to name an executor, the probate court names someone (called an administrator) to handle the process. The job often goes to the closest capable relative or the person who inherits the bulk of the deceased person's assets. If no formal probate proceeding is necessary, the court does not appoint an estate administrator. Instead, a close relative or friend serves as an informal estate representative. Normally, families and friends choose this person. It is not uncommon for several people to share the responsibilities of paying debts, filing a final income tax return, and distributing property to the people who are supposed to get it.


Should I plan to avoid probate?

Probate rarely benefits your beneficiaries, and it always costs them money and time. Probate makes sense only if your estate has complicated problems, such as many debts that can't easily be paid from the property you leave. Whether to spend your time and effort planning to avoid probate depends on several factors, most notably your age, your health, and your wealth. If you're young and in good health, adopting a complex probate-avoidance plan now may mean you'll have to re-do it as your life situation changes. And if you have very little property, you might not want to spend your time planning to avoid probate because your property may qualify for your state's simplified probate procedure. But if you're in your 50s or older, in ill health, or own a significant amount of property, you'll probably want to do some planning to avoid probate.

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