There are many ways that assets can be handled to achieve a probate-free goal. This will benefit your intended beneficiaries after your death. A living trust is the best mechanism to avoid probate in California. Our estate attorney can help you avoid probate in California.
A living trust is the most flexible and protective estate planning device available. It allows your assets to pass upon your death without probate. A living trust customized to your needs will function to avoid probate. There are many benefits to having an asset pass by way of trust to your chosen beneficiaries. To set this up, contact Iron Clad Living Asset Protection Lawyer at (951) 691-8897.
Many people do not realize that probate can be avoided. The easy way is to identify your beneficiary is to specify it on your bank or investment account. Any banking institution will permit you to do so on any checking or savings account. You are not making the other person a joint owner or user of the account. You are making them a beneficiary of the account upon your death. You can contact your brokerage and inquire into designating someone as a beneficiary. Many benefits that a trust could provide are lost. If the beneficiary is still living, then the asset will pass without probate.
California has in place a “small estates” law for estates valued under $150,000. Small estates almost always involve financial assets and not real property. The “small estates” law is compelling. If an estate qualifies for small estate status, your assets lacking a beneficiary can be transferred with an affidavit procedure. This helps avoid probate of the estate. The downside is that the asset will pass according to the statute. The order of priority in that statute may not be consistent with how the deceased wanted the asset to pass. An estate probate lawyer should handle this procedure. It can be accomplished without court intervention.
An interesting wrinkle to a living trust is that it can be named the beneficiary of an asset. This includes life insurance proceeds. The trust will provide much greater protection and flexibility for any asset. This includes life insurance monies paid to it as a beneficiary.
Real property is more complex for probate. There are ways to avoid probate without the preferred vehicle of a living trust. A married couple with title to a property with the right of survivorship will escape probate after a spouse’s death. However, the pitfalls of the lack of a living trust are still present. If the husband and wife died simultaneously, the property would go through probate.
Another pitfall is that the surviving spouse can avoid an asset’s passage to their children. They can add a new partner or spouse on the title to the property. Thus, the property has escaped the next generation of the original couple listed on the deed.
California also has a recent law in place. It allows for the transfer of real property through what is known as a revocable transfer on death deed. This law only took effect in 2016 and expires after 2020. The law does have its intricacies and limitations. A knowledgeable attorney should be consulted before undertaking any deed transfer. The danger of deeds is that the internet has made it seem an easy task. Often these options do not disclose the permanent, negative consequences. They can result from the transfer of interests in real property.
Another probate avoidance mechanism is achieved by adding a person to the title of your home. There are many limitations and downsides to this option. There could be tax consequences both before and after your death. An existing mortgage could be adversely affected, and a new one difficult to get. The property could be at risk of liability since it is now subject to the person’s creditors added to the title.
Assets such as bank accounts can have one or more users. This is known as multiple-party accounts. For a two-party account, one party’s death will shift sole ownership of the account to the survivor. As with other estate planning devices, the pros and cons of using a jointly owned account should be considered.
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