Berge & Berge, LLP Blog

Tuesday, March 6, 2018

Can a Person Really Avoid Probate?

You probably hate the idea that one day when you die, random strangers, nosy relatives, or gossiping neighbors might be able to look inside your probate court file and see a list of everything you owned, all your debts, and what assets you gave to which people. There has to be a better way. With careful planning and the help of an estate administration lawyer, you can avoid some aspects of the probate process.

Life Insurance

If you want to give money to your loved ones when you pass, buy life insurance and list your loved ones as the beneficiaries. Just make sure you do not name your estate as the beneficiary. If you do, the insurance proceeds will have to go through your estate, which will involve probate court.

Transfer-on-Death (TOD) and Payable-on-Death (POD) accounts

You can transfer your investments and brokerage accounts directly to someone using transfer-on death TOD) securities registration. You can also set up your bank accounts as payable-on-death (POD) accounts. When you die, these accounts will go to the person you named as the intended recipient. You can revoke a TOD or POD designation at any time during your life. Unlike with a joint account, the person you name as the future beneficiary has no rights to the asset until you die.

In 2016, California began allowing people to use revocable transfer-on-death deeds to transfer real estate without having to go through the probate court. It took about a half dozen attempts to get this legislation passed, but California finally joined over half of the states in allowing this option that is far superior to the “old school” life estate deeds, which are irrevocable. You can revoke a California TOD deed at any time, and the future beneficiary has no rights to the property as long as you are alive.

Living Trust

You can create a living trust that will distribute your assets to your loved ones after your death. Since trusts do not go through the probate court, your privacy is intact, your beneficiaries get the assets more quickly, and with much less expense. A living trust usually costs only a couple thousand dollars (depending on the complexity of the terms and the assets). Going through probate court, however, costs an average of $26,000. Just make sure you title your assets in the name of the trust, or it cannot distribute them.

“Pour-Over Wills”

Your lawyer will probably write a “pour-over will” along with your trust as a safety net for assets not in your trust. If a person is killed by a drunk driver, for example, the estate might recover compensation for the wrongful death. This compensation was not part of the trust, so the pour-over will take care of distributing it. If you moved your significant assets into your trust, the remaining miscellaneous items for the pour-over will might qualify for a simplified “small estate” probate administration. So, although most people cannot avoid probate court entirely, they can minimize and simplify it.

Joint Accounts and Community Property

If some of your assets are community property or titled as joint accounts with rights of survivorship, they will not need to go through probate. The primary difference between these assets and POD or TOD accounts is that with community property and joint accounts, the other person has rights to the assets while you are still alive.
The California laws on estates and trusts are complex. You should talk with a California probate attorney to protect your loved ones. Schedule a consult with the Law Offices of Berge & Berge today.

Archived Posts


Estate Planning and Elder Law News

© 2018 Law Offices of Berge & Berge LLP | Disclaimer
1101 S. Winchester Blvd, Suite I-208, San Jose, CA 95128
| Phone: (408) 389-6980

The LifePlan Program | Estate Planning | Estate Tax Planning | Business Succession Planning | Probate / Estate Administration | Elder Abuse/Conservatorships | Trust and Estate Planning | Public Benefits | Special Needs Planning | Trust Administration | | About Us | Forms | Resources

Law Firm Website Design by
Amicus Creative