Assets owned through a living trust do not need to be probated. The assets should be transferred to the trust by changing the titles to the assets. A deed should be used for real estate, and transfers for bank accounts and brokerage accounts can be made by visiting the institution that holds the account.
Avoid Probate with Joint Tenancy Ownership
If an asset is owned by two or more people as joint tenants, it will usually not be probated. These assets can be identified by the words "joint tenants," or "in joint tenancy," "JT TEN," or similar wording. When a joint tenant dies, the other joint tenant takes 100 percent ownership of the asset. This occurs regardless of the provisions of the will or trust of the deceased joint tenant.
Joint tenancy is not recommended for assets that can increase in value, such as a residence, because the surviving joint tenant will not receive a "stepped up cost basis" to fair market value at the date of death of the other joint tenant.
Avoid Probate with the Small Estates Law in California
The California Probate Code provides that probate estates of $100,000 or less do not need to be probated. In some cases, the actual estate may be well in excess of $100,000, but the small estate law can still be used. The reason is that many assets are not defined as probate assets, such as life insurance (unless it was payable to the estate), IRAs, 401Ks, assets held by a living trust, and joint tenancy assets. The $100,000 amount is calculated by totaling all of the probate assets owned by the decedent.
Estates valued at less than $100,000 worth of probate assets are administered by preparing affidavits which are presented to the various institutions (banks, brokerages, etc.) that hold the assets. The assets are then turned over to the person named as executor in the will, and distributed according to the will. If there is no will, the assets are distributed according to the rules of intestate succession (in other words, to the nearest relatives of the deceased.)
Avoid Probate with a Spousal Property Petition
If the decedent is survived by a spouse, the spouse can file a spousal property petition with the court. The purpose of this petition is to change the titles of the assets to the surviving spouse's ownership. The petition is a simplified probate procedure, and takes much less time than a full probate. Legal fees are usually much lower for this type of petition than a full probate.A
Additional resources provided by the author
Additional information is available at www.ca-trusts.com