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Horizon Elder Law & Estate Planning Blog

Thursday, January 21, 2021

Smoothly Transferring Estate Assets in California

Transferring assets of a deceased person’s estate do not have to be onerous. California provides a simplified procedure that allows the transfer of estate assets in some situations without having to go to probate court. Also, there are ways that a living person can arrange for specific assets to transfer to their beneficiaries automatically when the current owner dies.

A California estate planning attorney can answer your questions about both options and help you determine which strategy works best for your estate. A lawyer can also guide you through the process and draft the necessary documents to smoothly transfer estate assets in California.

California’s Simplified Procedures for Transferring Estate Assets

If the estate has a value of $166,250 or less, you might be able to use California’s non-formal probate process. First, the person who administers the estate will separate the “probate estate assets” from the “non-probate estate assets” to determine the value of the probate estate. The administrator or executor can gather the personal property and determine the heirs or beneficiaries.

The estate administrator can then file a declaration and distribute the personal property to the heirs or beneficiaries. One cannot transfer land or buildings (real property) using the simplified process. Also, no assets can get collected or distributed until at least 40 days after the decedent dies. If property would automatically pass to the surviving spouse, the estate administrator can use the simplified process to transfer those items.

Real property can transfer without a formal probate process if the decedent held the property in joint tenancy with another person. Be aware that joint tenancy creates tax consequences. Sometimes a person says in a will that their share of property held in joint tenancy will go to someone other than the joint tenant upon the will-maker’s death. The will does not override the joint tenancy.

Ways to Automatically Transfer Assets When a Person Dies

If you designate a particular person as the beneficiary of an asset, that item can go automatically to that beneficiary upon your death without having to go through the probate court. For example, if you name “Joe Smith, my son,” as the beneficiary of your life insurance policy with the insurance company, the insurer will send the policy proceeds directly to your son and not to your estate.

When you leave the beneficiary designation blank or name your estate as the beneficiary, the insurance company will pay the money to your estate, which will count toward the total value of your estate. Usually, it is best to designate someone as the beneficiary.

The insurer can get the funds into the hands of the beneficiary within a month or two of receiving the death certificate and claim, which is much faster than if those funds had to go through the probate court. You can name a beneficiary of your retirement account the same way.

You can arrange for the automatic transfer of a bank account or investment account to a specific person by using a Transfer on Death or Payable on Death form. This method has advantages over a joint account in that you own 100 percent of the account until your death.

The rules are a bit complicated in certain situations, but a California estate planning attorney can help you determine the best way to smoothly transfer estate assets. Contact our office today.


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