How can I avoid Probate in California?
The easiest way to avoid probate in California is to have a revocable trust.
We get the question of how to avoid probate in California a lot so we decided to write an article to give you some insight!
If you only have a will then when a person passes away, if they have over $166,250 of assets, a probate is required under California law.
Someone with assets totaling more than $166,250 needs to create a Trust. When you pass away the trust usually becomes irrevocable (non-changeable) and the trustee takes over without Court supervision. The lack of Court supervision keeps the cost lower than going through a probate which is a rather expensive process. With a trust the trustee continues and makes all the decisions that are necessary to satisfy the claims of creditors and manage the assets until the time they can be distributed to the beneficiaries.
I don’t like to overstate the benefit of a trust, but when somebody dies it’s not that they don’t have any costs in administering their estate it just means the costs are less than a full-blown probate.
Here are the other important Estate Planning documents:
- Durable Power of Attorney for Asset Management in case you become incapacitated
- Advance Healthcare Directive if you’re unable to communicate with your medical providers
The simplest way to avoid probate is to have a Living Trust, however a trust is not necessary for everyone.
What if I don’t have a huge estate at this point in my life?
If you have a very modest amount of assets (less than $166,250) and no real estate and then you don’t need a trust at all. A will should be sufficient for the main estate planning document but keep in mind that the Will trust you or not the only necessary estate planning documents available.
Are there any downsides to creating a Trust?
There’s another downside to a trust to keep in mind! The fact that there’s no court supervision is sometimes a problem when a believed to be honest person is the trustee and it could even be a family member and then that person takes money from the trust or buys things and not for the benefit of the trust.
We have seen some pretty bad cases where one family member has taken all the assets from the other beneficiaries just by virtue of the fact that they were a trustee without Court supervision.
One way around that problem of potential risk of its successor trustee is to buy a probate Bond or a Fidelity Bond (also known as a surety bond) and then the insurance company assumes no liability to give the money to the beneficiaries if the trustee squanders the money in some way.
The main point to keep in mind is that the best way to avoid probate is by creating a trust!
