Assets that Bypass Probate: Joint Tenancies, Living Trusts, and More

California Probate Process

As with many states, California’s probate process can be time-consuming and costly for all involved. It can mean that while grieving the loss of a loved one, you are now tasked with gathering appropriate documents, filing the necessary paperwork, being patient with the courts while the probate process occurs, and paying the associated costs, which can be unappealing in your time of grief.

By setting up as many assets as possible within a comprehensive estate plan to bypass the probate process, you can save time, energy, and, in many cases, costs. Depending on your estate, the probate process can take several months, sometimes up to 18 months or longer. Costs incurred through the probate process can vary greatly but can create a dent in the remaining assets for your loved ones left behind rather than utilizing the full benefit as you intended.

Another aspect to consider when ensuring assets are protected and can bypass probate is that this allows you privacy. The probate process occurs in the court system, meaning your private information is discussed publicly. If discretion is important to you, setting up your assets to avoid the probate process can be invaluable to you and your loved ones.

What is a Trust?

A trust is a valuable resource used within an effective estate plan to house and protect assets. Your estate planning attorney can help you determine which trust best suits your immediate and future needs. The assets used to fund a trust are typically allowed to bypass the probate process, keeping the information private within your family and less subject to fees or questions in the future.

A revocable trust allows you the flexibility to make changes as life unfolds.

While far less flexible, an irrevocable trust can offer appealing benefits such as fewer tax implications and fierce protection of the assets within should your assets be subject to creditors or lawsuits. This added protection can be invaluable for those in professions such as lawyers or doctors susceptible to significant lawsuits.

Within the trust category are options such as a special needs trust, which can be set up to care for loved ones with disabilities, a charitable trust to benefit your favorite non-profit or charity after you are gone, and more.

How Does Joint Tenancy Work?

When an asset such as property is owned by two people, both parties typically hold equal shares in a joint tenancy. When one of the parties dies, the other half of the asset’s value transfers to the surviving owner without the need to pass through probate.

Assets such as property (buildings or land), bank accounts, or stocks and bonds are typical examples of assets that can be held in joint tenancy.

It’s important to note that if you do not intend for the other owner to inherit your share when you pass away, you should title the asset differently or handle your portion of the asset using another estate planning resource.

Other Ways to Avoid Probate in California

With several options to avoid the probate process, you can work with your estate planning attorney to ensure the process is less intrusive or time-consuming.

Another common way to title assets so they can bypass the probate process is to label them as Transfer on Death. While bank accounts are some of the most common to be titled this way, another option includes labeling your stocks and bonds portfolios as Transfer on Death.

Speak with the bank or holding entity for the account regarding how to include Transfer on Death verbiage and update this information as necessary throughout life’s changes.

Typical examples may be checking accounts, savings accounts, Certificates of Deposit, etc.

Designating Beneficiaries

Designating a beneficiary for all assets—bank accounts, life insurance policies, or pensions—is a common practice that nearly everyone can benefit from.

You can ensure that each asset is accounted for by periodically checking on each account and ensuring that a valid and current beneficiary is named for the asset.

A best practice is to review these beneficiaries regularly to ensure the information is relevant. For example, suppose you have labeled a beneficiary in the past, and they have since died. In that case, you will want to update this information for relevancy or risk of that asset being subjected to probate.

Additionally, as different chapters in our lives unfold through divorce, marriage, or other significant changes in our family, the current beneficiary named may no longer be the person you wish to obtain the asset upon your death. Reviewing beneficiaries and updating them as necessary can help ensure that only those who want to benefit from the asset will have access to it.

Why Work with an Estate Planning Attorney?

When it comes to our finances and the legacy most of us have worked our entire lives for, it can be overwhelming to determine who truly has our best interests at heart. With a compassionate and straightforward approach, our firm empowers our clients to ensure their life’s work is protected and planned for to the best of their ability and that those they love the most can benefit from their successes for years to come.

With over a decade of experience caring for those with special needs before beginning her journey in the legal world, our lead attorney’s compassion and fierce advocacy for her clients remain.

You will notice it, as her other clients have, in her ability to see the big picture, anticipate her client’s needs, avoid unnecessary obstacles, whether through taxes or otherwise, and have caring yet honest interactions with her clients to navigate their estate planning needs.

Contact our office today at 909-675-1545 to schedule your consultation and learn more about how we can best serve you and your family for future generations.