2890 N. Main Street, Suite 206 • Walnut Creek, CA 94597

How To Avoid Probate

Probate is a legal process used to pass a deceased individual’s property to heirs and beneficiaries of the deceased. Probate must be initiated whether an individual dies with or without leaving a will. A will aids the court in determining how property and assets should be disposed. The probate process can be a lengthy, costly, and complicated process even when the deceased has a valid will accepted by the court. Many people want to avoid the time, expense, and red tape presented by the probate process while ensuring their assets pass according to their wishes. Here are four general ways to avoid the headaches of probate:

1) Joint Property Ownership
Jointly owned assets are not a part of an individual’s probate estate. When you jointly own property with another person such as a spouse, ownership passes to the surviving joint owner upon the predeceasing owner’s death. There are three common ways to create this, which include joint tenancy with a right of survivorship, tenancy by the entirety and community property.


2) Trusts & Living Trusts
A second way to avoid probate is through a trust. Because the law considers trusts to be a type of contract and contracts are not subject to probate, assets disbursed through trusts avoid probate. There are two basic types of trusts: living trusts and testamentary trusts. A living trust or an “inter-vivos” trust is set up during the person’s lifetime but can contain instructions for the distribution of assets and property after death. A Testamentary trust is set up in a will and established only after the person’s death when the will goes into effect. Both types of trusts avoid probate. Our office can help determine what type of trust is best for you.

3)Use Beneficiaries

Many financial assets such as payable-on-death accounts, certificate of deposit, life insurance, retirement accounts, and some bank accounts allow you to keep money—even a large amount of it—out of probate by designating a beneficiary on the paperwork who will automatically receive the asset or account balance upon your death.

4) Gifts During Life
Because the probate process is only concerned with property owned by the decedent at death, the last way to avoid the probate is to gift property and assets during your lifetime. While this may seem simple, this does require some planning and consultation in order to avoid federal gift taxes imposed on the donor when he or she gifts assets and property in excess of the annual federal gift exclusion to an individual. For 2016, the annual federal gift limit was $14,000. For example, you and your spouse could each gift your grandchild $14,000 for a total gift of $22,000 without incurring gift tax.

Whether you are interested in learning more about avoiding the probate process or need help administering a probate estate, please contact our office today at 925-943-2740.