What Are Probate Assets and What Happens To Them When I Die?
By Gullotta Law Group on April 21st, 2020 in
As you learn more about estate planning, you’ll likely come across the terms “probate assets” and “non-probate assets.” If you are new to the world of estate planning, these may be unfamiliar to you. Learn more about probate, probate assets, and why it may be in your best interest to keep your assets out of probate.
What are probate assets?
Probate assets are those that must go through the probate process after your death. The probate process ensures the validity of the will, makes sure that debts are paid off and distributes remaining assets to beneficiaries. If there is no will, the probate process ensures that the decedent’s assets follow the laws of intestate succession. Assets subject to probate include:
- Homes, vacation homes, cars, boats, and other tangible goods (if they are the sole owner; if they are owned jointly with another party, they may avoid probate)
- Checking accounts
- Savings accounts
- Business shares
Assets that may not go through probate include:
- Property owned jointly with another party; when this occurs, the decedent’s share may pass to the joint owner after their death
- Bank accounts and insurance policies with beneficiary designations
- Property in a trust
How are assets distributed after my death?
Assets that have transfer-on-death designations can generally be transferred as soon as the entity holding the property receives proof of your death. Those that go through probate may take far longer to be distributed. Probate court must complete the probate process before assets are distributed according to your written wishes.
What is the probate process in California?
The probate process follows these steps:
- The named executor begins the probate process by filing paperwork with the court. If there is no will, a family member must begin the process and ask to be named as administrator of the estate.
- The executor files the Petition for Probate and pays the filing fee.
- The court gives the executor permission to manage estate assets.
- The executor inventories the decedent’s assets and sets up a system to manage the assets; this includes paying the mortgage and paying other bills that keep the assets’ value.
- The executor must get a taxpayer ID for the estate and open a bank account for the estate.
- Throughout the following months or years, the executor must maintain and protect the assets. This includes filing taxes and repairing damage caused to assets.
- Within four months, creditors must file their claims against the estate.
- Bills and taxes are paid from the estate.
- The court closes the estate at the executor’s request. After fees are paid, the executor distributes the remaining assets.
How can I avoid probate?
Obviously, you want to help your family as much as possible, and that means avoiding probate. The executor of the estate could spend six months to a year managing your estate if everything has to go through probate, which is challenging when they are also trying to handle the emotional aspects of a loved one’s death.
One of the easiest ways to avoid probate is to transfer assets to a trust. Assets held in a trust do not go through probate since they are owned by the trust and not by the person who created the trust. Management of the trust passes to a trustee upon the creator’s death, allowing for quick and efficient handling of assets. As an added benefit, this process is much more private than probate. Probate documents are public record.
Find Out How Gullotta Law Group Can Help You
Whether you have found yourself as the executor of someone’s estate and you’re not sure how to move forward with the probate process or you want to plan your estate so your loved ones can avoid probate, we are here to help. Schedule your appointment now or call us at 707-938-7234 to get started.