If your loved one’s estate plan included a will, it will need to go through probate court for its contents to disburse. Yet, they may have excluded certain assets that they held from their will. Some omissions may be accidental. But more likely, these omitted assets qualify as non-probate property. As you gather your loved one’s assets, it’s important to know whether they are exempt from probate or not.
While most your loved one’s assets will pass through probate, many of their individual accounts will avoid it. Your loved one may have held bank accounts, retirement accounts or a life insurance policy which they designated to beneficiaries. So long as each account names one on its paperwork, their ownership will transfer to them upon your loved one’s death. If your loved one did not name beneficiaries to these accounts, they will go through probate.
Transferrable real estate
If your loved one owned a home or other real estate, they may have named beneficiaries to these properties through transfer on death (TOD) deeds. These deeds apply to houses, condominiums and multiple family residences with four or fewer units. Instead of going through probate, the property deeded to the beneficiary will pass straight to them. Yet, it will go through probate if your loved one did not file the TOD deed with their county clerk’s office within 60 days of signing it.
California is a community property state, and any property your loved one owned with a surviving spouse will pass to them outside of probate. Yet, these assets’ titles must declare a right of survivorship to transfer in this manner. If your loved one owned property with a person other than their spouse, it can pass to the co-owner in this manner, too. This arrangement is known as joint tenancy with right of survivorship. And it helps assets avoid probate so long as your loved one and their co-owner held equal shares in it and signed its title or deed at the same time.
While most of your loved one’s property will disburse through probate, certain assets can avoid it, so long as they are properly titled. Understanding how these assets transfer will help you ensure the process goes as smooth as possible.