Essential Strategies to Avoid the Pain of Probate

Probate is a court-supervised process for distributing a deceased person’s assets. Many Californians dread it, and for good reason. It can be expensive, time-consuming, and emotionally draining for your loved ones. Failing to take the necessary steps to avoid probate may leave your family facing excessive legal fees, lengthy court proceedings, and potential disputes that can tear them apart during their time of grief. To protect your family from these hardships, consider the following strategies to ensure your estate avoids probate and its negative consequences.

1. Create a Living Trust: A key goal of estate planning is to avoid the trouble and costs associated with probate court upon death and incapacity. Creating a living trust is an essential step, but it’s not enough on its own. Once you have a living trust, work with an experienced estate planning, trust, and probate attorney to ensure that your assets are properly titled. This will guarantee that upon your death, assets titled to your living trust are distributed according to your instructions and avoid probate. Additionally, a living trust’s administration remains confidential and private after you pass away. In California, probates are public record and can take months or even years, leaving your loved ones waiting for their inheritance. By establishing a living trust and properly titling your assets, you can prevent probate.

2. Create a Business Plan: When a business owner dies without proper planning, their business interests become part of their estate and may have to pass through probate court according to state law. As a result, the business could be inherited by someone unfit to run it, or by someone the deceased business owner would not have wanted to receive the business. This situation can be avoided with thoughtful planning. A written business agreement, along with an assignment of the business owner’s interests to their trust, allows the business to bypass probate and ensures it is distributed to the intended successor.

3. Name Beneficiaries on Your Retirement Accounts: Failing to designate a beneficiary on your retirement account(s) may result in the probate of those accounts. The surviving spouse is not automatically entitled to inherit the money in the deceased spouse’s traditional IRA or Roth IRA. However, a special rule applies to 401(k) plans and other “qualified plans” governed by federal law: your spouse is typically the automatic beneficiary upon the death of the owner of the qualified plan. If you have a retirement account, it is recommended that you designate a beneficiary in order to avoid probate.

4. Don’t Rely on a Last Will: A Last Will that clearly identifies beneficiaries and their entitlements can make the probate process easier, but it’s not sufficient to avoid probate. A Last Will alone, without an accompanying living trust, will likely guarantee probate in most instances.

The probate process can be costly, time-consuming, and emotionally taxing for your loved ones, adding to their heartache of loss. It is crucial to work with an experienced estate planning, trust, and probate attorney to implement a tailored estate plan that meets your needs and goals while safeguarding your loved ones’ futures.