In California, certain small estates may not be subject to probate, instead they may be able to take advantage of less costly “small estate procedures.” As of January 1, 2012, there is a new definition of “small” estate. The new limit is $150,000 in non-real estate assets and up to $50,000 in real estate.
If your assets otherwise subject to probate don’t exceed these amounts, your estate may be able to avoid for expensive and time consuming formal California probate process. However, depending on the types of assets held at death, getting access to even these modest assets may involve the use of a very specific so-called “small estates affidavit” or a simplified court procedure.
This means that if one’s assets are modest, his or her loved ones will not have to deal with the formal California probate system at death. Most folks like to avoid probate for several reasons; probate can take a long time and cost a lot of money; it’s a hassle and is a public process.
Besides having a small estate, there are other ways to avoid probate as well. These assets are exempt from probate:
- Assets titled in the name of a revocable living trust.
- Assets with an individual, entity or trust named as the designated beneficiary.
- Assets owned in joint tenancy with right of survivorship with someone else.
- Assets titled with an “in trust for” designation.
- Assets with a “pay on death” or “transfer on death” designation.
- Any assets you don’t own and don’t control at your death, such as assets you’ve previously given away.
Each of these transfer methods has its pros and cons. One of the most common, joint tenancy, can have disasterous affects, e.g., inadvertent loss of control and unnecessary taxation. How to avoid probate and effeciently and effectively transfer assets at death depends upon your personal and financial situation. The best way to make sure your assets are exempt from the probate process is to consult with an experienced, qualified estate planning attorney.