When someone passes away, you may be wondering if probate is really necessary.
Yes, the decedent left a mix of assets and debts. But couldn’t you, as the personal representative, just handle everything outside of court? Not only would it save on costs, but it might even be faster and more efficient, in some cases.
The bright side, at least to some, is that they avoid the complexities of court proceedings, and avoid having to deal with lawyers. So it’s a legitimate question – can you do probate without a lawyer? Or more pointedly, can you avoid probate altogether?
Below we take a look at some instances where an estate, or certain estate assets, are not required to pass through probate.
Assets That Automatically Skip the Courtroom.
There are a number of asset types that transfer automatically to another person in the event of death. These types of transfers are specifically designed to avoid probate.
If the estate is comprised primarily of these types of assets, a full probate may prove largely unnecessary:
Joint Tenancy Property
Properties such as real estate and other assets that are held in joint tenancy transfer automatically to the surviving joint tenant, should the owner pass away. This is a transfer facilitated by the rules on joint tenancy.
For instance, if a husband and wife held their family home under joint tenancy, if one spouse should pass away, the title automatically transfers to the surviving tenant. No probate needed. The only legal hurdle, if at all, is that the surviving spouse would need to record an Affidavit – Death of the Joint Tenant, and include a certified copy of the decedent’s death certificate, on the title of the property.
POD and TOD Transfers
Some assets, like life insurance proceeds, bank accounts, and retirement funds such as IRAs and 401ks, require the account holder to designate a beneficiary. These accounts are also usually covered by contract, and these contracts contain a Pay on Death (POD) or Transfer on Death (TOD) provision.
These transfers of the benefits of these types of financial products usually go directly to the designated or recognized beneficiaries. As the name implies, they are paid or transferred directly on death and are considered non-probate transfers.
Trust Assets
Living trusts are a watchword for a lot of people who are conscious about protecting their assets. Essentially, their assets are held in the name of the trust and are administered by a trustee. If the trustor should die, any transfers or distributions of the trust assets are governed by the trust documents. these are handled by the trustee and are completely independent of estate assets and probate proceedings.
The Small Estate
California provides summary administration procedures for estates that fall below specific monetary limits. If the total value of the estate does not meet this threshold, the representative has the option of using the Affidavit procedure. This is governed by California Probate Code §13100.
The Affidavit procedure allows the representative to use a Small Estate Affidavit to simply transfer the property to their name. If the property in question is real estate, then you would need to use an Affidavit of Real Property of Small Value (Form DE-305).
This method, however, requires a mandatory 40-days waiting period after the person has passed away, and assumes that no probate process has been initiated. The affidavit is usually presented directly to the person, company or entity in possession of the property, and authorizes them to facilitate the legal transfer of the property to your name.
To be considered a small estate, the applicable thresholds are:
- If the decedent dies before to April 1, 2022, the estate is small if it is valued at $166,250 or less;
- If the decedent died from April 1, 2022 to before April 1, 2025, the estate is small if it is valued at $184,500 or less; or
- If the decedent died on April 1, 2025 or after, the estate is considered small if it is valued at $208,850 or less
This threshold value does change periodically, so you may want to double check the applicable thresholds at the time of death before seeking to avoid probate as a small estate.
The Spousal Property Petition (Form DE-221)
For spouses or registered domestic partners, if one spouse or partner passes away, the transfer of their property to the surviving spouse or partner can be facilitated by filing a Spousal Property Petition, or Form DE-221.
While this does require a court order, and going through legal proceedings, it is a much more simplified process compared to a full probate.
Even more significant, though, is that the threshold of small estates do not apply to spousal transfers. So even if the value of the estate exceeds $208,850, if the death took place after April 1, 2025, the surviving spouse or partner can still explore the Spousal Property Petition as an option.
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If you are currently dealing with the effects of a recent death of a loved one, and think that you may not need to go through probate, we can help clarify your options. Feel free to reach out to us and schedule a consultation.