Probate court is almost synonymous with receiving an inheritance. When someone dies, the California probate courts often oversee the administration of their estate. The courts help prevent family members from overlooking financial obligations and executors from playing favorites instead of following instructions.
However, although the probate courts do provide oversight, they can also diminish how much people actually inherit from an estate. It can consume thousands of dollars to pay for legal representation and time in court.
Is it possible to plan ahead to avoid probate for your estate?
Only your personal property passes through probate
Perhaps the simplest way to keep assets out of probate court is to change who owns those at that time. Belongings in your name become part of your estate when you die. If you transfer that property to someone else or into a trust, then those assets don’t have to go through probate court.
Moving your home into a trust can be a good move, as real estate will almost always trigger probate oversight if the property is only in your name. Moving property into a trust has the added benefit of protecting those assets from tax and from creditor claims.
Assets can transfer when you die
Some of your most valuable assets could include specific financial accounts and insurance policies. You can name family members as direct beneficiaries for insurance policies so that the funds do not become part of your estate. You can also add transfer-on-death designation for financial accounts so that they become the property of a specific person once that individual provides the financial institution with your death certificate.
Challenges can also lead to probate court
Another reason why estates wind up in probate is because of litigation. If one of your family members is unhappy with the estate or they suspect fraud, they could initiate a challenge that causes extensive litigation. While you can’t control what your loved ones do after you die, you can add a no-contest clause to your documents to reduce the risk of a challenge. Talking with your family members about your estate plans so that they don’t find anything surprising when you die can also deter challenges.
Considering different strategies for avoiding probate court can be an important part of modern estate planning.