Have you considered what will happen to your assets when you pass on? To whom and how you designate your assets prior to your death can impact how these assets are distributed after you pass away through a process known as probate. Various assets are subject to the California probate process and, depending on your particular circumstances, probate can take a few months or a few years to resolve.
So, how does the probate process work and in which situations is probate necessary? In this guide, we’ll explain everything you need to know — from what probate administration is to what qualifies as probate and non-probate assets.
What Is Probate Administration?
Probate administration is the process of managing and distributing a decedent’s assets. Typically, the process is dictated by what the decedent — the person who has died — places in an estate planning document, such as a will. If a decedent dies without a will, assets are distributed based on California state law, namely the “intestate succession” statutes.
The probate process ensures that all taxes and debts are paid and that the proper people receive their designated portion of the assets. While probating an estate will take around a year in most cases, depending on the complexity of the estate, the process may take several years or just a few weeks. The probating process will usually begin a few months after the decedent’s passing.
Probate administration is especially important because it ensures that a decedent’s assets are distributed according to their will or, in the absence of a will, in a fair and equitable manner. The court requires an individual to oversee the probate process. For “testate estates” where the decedent left behind a will, the named executor often oversees the probate process. For “intestate estates” where the decedent did not leave behind a will, the court appoints an administrator to oversee the estate — often the decedent’s closest living relative.
How Does Probate Work in California?
There are two types of probate procedures, namely, simplified probate and full probate procedures. California allows for a simplified probate process if the size of the estate is small or the administration of the estate is not complex. Full probate, which can be done for estates with or without a will, refers to the standard probate proceedings if an estate cannot use simplified probate proceedings.
According to California law, the representative has one year from the appointment date to complete the probate process. However, this date may change depending on whether they filed a federal estate tax. If the estate requires a federal estate tax filing, the personal representative will gain an extra six months to complete probate. If the personal representative is unable to complete the probate process in a timely manner, they must file a status report to the court with an update on what they still need to do and how much time this will require.
There are three general steps one should take in the probate process according to California probate requirements. These steps include:
- Gathering important information and fulfilling duties: This involves ordering certified copies of the death certificate, collecting the death benefits and assets and canceling credit cards and subscriptions. It also requires the representative to notify certain governmental agencies such as the Social Security Administration and the California Franchise Tax Board about the death of the decedent.
- Establishing the beneficiaries and heirs: An heir is a person in line to receive an inheritance, while a beneficiary is someone named in a legal document to receive property or assets. The deceased may name these individuals in an estate planning document, such as a will. If no will is available, the heirs will be determined by California’s intestate succession laws.
- Creating a list of assets: This step involves forming a list of the assets the deceased owned and sorting them into categories such as real property, personal property and debts. The representative should list these with a detailed description, the ownership portion and value.
When Is Probate Required in California?
While some situations can go without probate, there are various circumstances when a decedent’s estate requires probate. Some of these situations include the following:
- When the decedent owned real property: Real property such as a business or house often requires probate to transfer the ownership of your assets to someone else, unless there are other stipulations for the property, like that owned as joint tenancy with right of survivorship.
- When the estate holds a value of $166,250 or more: You can estimate whether your estate passes the threshold by adding up all your assets and deducting all debts and funeral expenses.
- When the decedent dies without a will: Someone may need to hire an attorney to determine how to best distribute the assets and who should receive them.
- When someone contests the will: When someone contests the validity of the will, the administrator or executor may receive help from an estate planning attorney to represent the client’s interests.
- When the deceased had debts to pay: If there are unpaid tax obligations, mortgages and loans, probate may be necessary.
- When some of the heirs are minors: Heirs under 18 years old will need an authorized professional to represent their interests.
Probate vs. Non-Probate Assets
There may be situations where you are uncertain whether an asset or property classifies as a probate or non-probate asset. Let’s talk about what assets are subject to probate in California and which assets will not require probate.
Non-Probate Assets
Non-probate assets include assets partially owned by others, such as assets owned in a joint tenancy or assets that list a beneficiary or beneficiaries. A common example involves joint property ownership for spouses. If one spouse passes away, their ownership of the property automatically passes on to the surviving owner or spouse. A few more examples include:
- When an asset has a joint owner, the joint owner will inherit the asset — for example, a joint bank or brokerage account.
- If your asset has a designated beneficiary, such as a pay-on-death (POD) account, the beneficiary will inherit the asset. Some bank accounts have this designation.
- If a trust owns the asset, the trust beneficiary will inherit the asset.
- Life insurance policies or certain retirement benefits.
Probate Assets
Probate assets are any assets that exist only in your name alone, without a named beneficiary. When you die without creating a will, your assets will be subject to probate administration and your next of kin will usually inherit these assets. Otherwise, your last will may determine which beneficiaries receive your different assets. These assets can be various things, including your:
- Home
- Furniture
- Vehicles
- Stocks
- Money
- Intellectual property rights
Common examples of situations where your assets become subject to the California probate process include the following:
- When your assets are separate property inherited during marriage or acquired outside of marriage and are only in your name.
- When your share of property is held as a “tenancy in common” with other people.
- When you acquired half of a community property.
Speak With a Probate Administration Attorney Today
By working with an experienced probate administrator from Barulich Dugoni & Suttmann Law Group, you can rest assured that your probate administration needs are fulfilled. Our estate planning probate attorneys make sure to probate an estate in full compliance with California law and help with initial proceedings, paying valid estate taxes and creditor claims and more.
For a smooth probate administration process, contact a California attorney from Barulich Dugoni & Suttmann Law Group today.
