If you have a will and not a trust, when you die your estate will have to go through probate. In general this means that all the property that the deceased owned at the time of death such as real property, personal property, bank accounts, investment accounts, etc. will be part of the probate estate. However there are some exceptions. You may have in your estate some assets that do not go through probate in California. These are some of them:
1. Property held in joint tenancy. An example might be a home you own with your spouse with a “right of survivorship.” Sometimes people own their cars in joint tenancy with other people or a bank account in joint tenancy. When a joint tenant dies, the other joint tenant(s) inherit the property without the probate process. Although assets held in joint tenancy avoid probate, holding title in joint tenancy can cause other problems such as the potential loss of a full step-up in basis which can result in capital gains. Another problem which can result when you own something in joint tenancy is that creditors of the other joint tenant may be able to enforce a judgment against the property.
2. Payable on Death Accounts (or POD accounts). This is a type of account where you choose a beneficiary who will receive the account upon your death. These accounts pass to the beneficiary without probate.
3. IRAs and Retirement Accounts. Benefits payable to beneficiaries under these accounts automatically pass to the named beneficiaries and avoid probate.
4. Life Insurance Proceeds. Just as with pension and retirement plans, life insurance proceeds bypass probate and are paid directly to the named beneficiaries.
Another way you can avoid probate is to transfer your assets into a revocable living trust. Assets which have been transferred into the name of the trust are non-probate assets. Contact the experienced estate planning lawyers at Law Office of Scott C. Soady, A Professional Corporation if you would like more information about a trust or putting your assets into some other form which will avoid probate.