For many people in California, the estate planning process is something they begin because they have heard horror stories about probate and want to do everything they can to avoid it. While avoiding probate is always a good idea, it’s often a very misunderstood part of the law. Let’s take a look at probate and how it can complicate the estate settlement process.
When you die leaving behind legal or financial affairs, someone has to wrap those affairs up. Probate is the collection of laws and procedures that apply after you die that regulate how this settling of affairs process works. A California court will supervise the probate process, even though the nuts and bolts of settling the affairs will be left up to others. Probate is not necessary when you create a comprehensive trust-based estate plan and all your assets have been properly titled in the name of your trust. Probate is also normally avoided when assets are owned jointly with another person, e.g., in joint tenancy, or when the asset passes by means of a designated beneficiary. However, both joint tenancy ownership and use of beneficiary designation may bring their own problems. Consult with an experienced and qualified estate planning attorney to determine which planning strategies are best for you.
To properly wrap up your estate, one of the more important probate elements is the inventory process. This is simply a process whereby someone, called an executor or administrator, finds out exactly what you left behind and assigns a dollar value to it in order to be able to use your property to pay off debts and distribute inheritances.
To ensure that estate property is properly valued, the probate court will appoint someone to determine the fair market value of significant assets. This appraiser, known as the probate referee, doesn’t work for free, and is paid based on the value of the assets appraised. This appraisal fee, along with fees charged by the executor and other costs associated with probate, is one of the main reasons why it is often beneficial to use probate avoidance tools.
- Joint Tenancy: Watch Out for the Perils – Part 2 of 2 - December 7, 2022
- Joint Tenancy: Watch Out for the Perils – Part 1 of 2 - December 5, 2022
- Getting Started in Estate Planning – The First Meeting with Your Attorney - December 3, 2022