Many California residents may look at the probate process with mixed feelings. For some, the proceedings may seem like an unnecessary use of time and money, and others may see it as a beneficial process for closing an estate. Whether your estate will need to go through the process may depend on the specific details regarding your assets and other personal affairs.
Though it could potentially have its complications, probate could also help ensure that surviving parties honor your wishes and that your assets go to the desired parties. Because you may wonder whether you should take steps to avoid the probate process when creating your estate plan, you may wish to learn more about the process.
Probate and non-probate assets
First of all, not all assets need to go through the probate process. Essentially, any property that already has a beneficiary designation could pass directly to the named individual or individuals rather than having to be distributed during probate. Some of these assets could include:
- Retirement accounts
- Transfer on death/Pay on death accounts
- Assets in trusts
- Insurance policy proceeds
- Jointly owned property with right of survivorship
Assets that do not have pre-named beneficiaries will need distributing by the terms of your will or state law. Probate assets may include:
- Individual assets deemed personal property
- Real estate
- Accounts without beneficiary designations
Property that does not have to go through the probate process will often pass to the beneficiaries more quickly than assets that need probating. Of course, details of the estate plan could also impact how quickly asset distribution takes place.
Probate costs and inheritances
Because probate is a legal process, it comes with monetary expenses. Typically, the estate covers these expenses with the decedent's remaining funds. However, this may mean that the value of your estate could decrease slightly, and as a result, inheritances could lose some value. Therefore, when planning, you may wish to take this factor into account if you hope to leave specific amounts to certain individuals.
Addressing your estate planning needs can have its complications if you do not understand the legal proceedings associated with closing an estate. Issues could potentially arise that you may not have considered due to a lack of information. Therefore, you may wish to learn more about probate, whether you have a need for the process and what steps you could take to build an estate plan that best suits your needs and desires.