Understanding Probate
In order to differentiate between the types of assets which will undergo probate, and those which will not, it is imperative to understand what probate entails. Probate is a legal procedure that occurs when someone dies. The probate court will assess the decedent’s assets and proceed in accordance to the decedent’s Last Will, if one exists. If no Will exists, then the court will proceed with distribution as defined by each state’s intestate succession laws. Probate should take at least four months to complete, but can sometimes last up to years. In addition to the lengthy process, probate is expensive. A standard probate is expected to cost 5% of the total gross value of the decedent’s estate. That’s a lot!
Which Assets Go Through Probate
It is important to understand which assets go through probate, and why. Before we get to the types of assets involved in probate proceedings, there is an important distinction to be made regarding the assets’ values in a probate. According to California Probate Code §13100, the decedent’s estate qualifies for a small estate probate if the gross value of the estate is under $166,250. This policy is effective as of January 1, 2020. The small estate probate does not undergo the same rigorous procedures as a standard probate, so it should not take as long. Now for the important stuff, the assets.
Which assets go through probate? The short answer is – ALL of them. Assets can be classified into tangible, and intangible categories. Here are some examples of each:
Tangible Assets
- Real Property
- Cars
- Jewelry
- Art
Intangible Assets
- Bank Accounts
- Stocks and Bonds
- Insurance Policies
- Business Interests
All these assets will go through probate at the time of the decedent’s death. One thing to consider is how difficult it can be to track down each and every asset, or the challenges of maintaining and selling other assets. For instance, the decedent may own certain stocks that are not made aware to their family, which could trap those assets forever. You may be wondering if there is a simpler solution to dealing with all this? Of course, no one wants the stress of the lengthy and expensive probate, dealing with unknown assets, or communicating with the courts. This is where we come in!
Bypass Probate
Yes, you can bypass probate. There are steps that can be taken prior to one’s death in order to avoid probate, and simplify the process of distributing the decedent’s assets. Step one is to contact our firm. We help people all the time avoid probate by creating durable plans which protect assets and secure the future for loved ones. This magical remedy is known as a Trust. Placing assets into a Trust allows an estate to avoid probate, distribute assets to anyone the grantor of the Trust desires, and more. To learn more about protecting your assets from probate, please contact our firm and schedule your initial consultation.