Many people who go through estate planning in California express the desire to avoid the probate process. What does that mean? Probate is the legal process of distributing one’s assets after death, either pursuant to the instructions in one’s will or without a will. Avoiding probate is not currently done to lessen the tax burden because most people are exempt from federal estate taxes under the current laws.
The main reason to avoid probate is to have one’s heirs save months of time waiting for the assets to be liquidated or otherwise prepared for distribution, filling out considerable paper work, avoiding public scrutiny and reducing the cost of legal fees. Many assets can be set up to pass automatically upon death. This requires titling the asset in the name of the decedent and the surviving heir, and designating that the right of survivorship applies.
Thus, where a bank account is titled to John and Mary, as joint tenants with the right of survivorship, the funds will pass automatically to Mary upon John’s death, and vice versa. That procedure avoids having to list the funds, or half of the funds, in the decedent’s probate estate. This is of course a common way in which married couples hold ownership of their residential real estate.
Where an investment or insurance policy is set up with a beneficiary listed, the proceeds will go directly to the beneficiary at the owner’s death, thus avoiding probate. The most common way in California to set up assets to avoid probate is to create a revocable living trust. As the name suggests, it is established and funded during the person’s lifetime, and the maker of the trust can revoke it at any time if desired. It is always advisable to determine the best estate planning strategy by seeking a consultation with an experienced estate planning attorney.
Source: nextavenue.org, “Probate, Wills, Executors: Your Estate Planning Questions Answered“, Richard Eisenberg, April 7, 2017