Not Every Estate Needs Probate
If you have been chosen as the executor to handle the estate of a friend or loved one, or are appointed by the Court as the fiduciary to handle a probate matter, you may find the probate process lengthy, confusing, and most likely expensive. The good news is that not every asset of the decedent is a probatable asset that must go through the probate process.
Many factors separate probate from non-probate estates and assets, including the size of the estate, whether the asset has a beneficiary designation, or whether the asset is titled in a way that avoids a general probate administration.
At Conover & Grebe, LLP, our focus is helping individuals and families in all probate and estate administration matters, including non-probate administration handled in Court or outside of Court. Our attorneys can help you determine the type of estate you are handling and assist you in bringing the matter confidently to a conclusion.
When Do You Need A Non-Probate Administration?
In California, several situations may lead to a non-probate administration. It may be a smaller estate, the assets may be held by the Trustee of a trust, the asset may have been transferred out of the trust (with or without purposeful planning to do so), or the asset may be titled to transfer on death directly to one or more beneficiaries. Each situation requires a different process. For example:
- Small estates: In California, any estate with a total value under $150,000 may be processed using an affidavit. You may use the affidavit to collect assets such as bank accounts.
- Trust assets: If the decedent title his or her assets into a trust prior to his/her death, the trustee/successor trustee will need to distribute the asset in accordance to the trust to the designated beneficiary – and not to the probate estate. A trust is a contract/agreement and does not go through the probate process. Rather, the trustee of the trust will be responsible for administering the assets according to the trust provisions set up by the settlor/trustee (the now deceased person).
- Transfer on death: Some assets and/or financial accounts are known as payable on death (POD) or transfer on death (TOD) accounts. The owner of the account named a beneficiary or beneficiaries to whom the asset(s) should transfer to upon his/her death. These assets often require some sort of affidavit or proof of death for the transfer to the named individual.
Handling Real Estate Outside Of Probate
Real estate can often be the largest asset a person owns at the time of their death and can require a considerable amount of time and resources to process during probate. Some property owners take steps to avoid probate of their real estate through re-titling the property to a trust, joint tenancy, or recording a transfer on death deed (TODD).
If an owner adds another person as joint tenant on the title, and if one of the joint tenant dies, the remaining joint tenant may wish to record an affidavit to remove the decedent from the title after death. If the decedent transferred the real estate prior to his/her death to their trust, the real estate will be distributed during the administration of the decedent’s trust, following the settlor’s instructions set forth in the trust.
Finally, California allows for a TODD. Similar to financial accounts with beneficiary designations, a TODD allows a property owner to name a beneficiary to take title to the real property upon the owner’s death. The beneficiary can transfer the title by filing an affidavit, similar to a joint tenant.
In some cases, even when a formal probate may not be necessary, transferring real property to its proper beneficiary may require some sort of Probate Court intervention. The most common of these is a Spousal Property Petition which is sometimes necessary when there is no right of survivorship conveyed on the titling deed for a property owned by a married couple. This procedure confirms the community property interest of the surviving spouse and transfers the community property of the deceased spouse to the surviving spouse. It is important to discuss with an attorney when this option is available to avoid the formal probate property. Other circumstances requiring a court procedure outside of formal probate include Affidavits Re Real Property of Small Value (Under $50,000) and Petitions to Determine Succession to Real Property which are both available in estates under the $150,000 formal probate minimum.