This article describes some of the more common types of property we may own and whether or not it will avoid probate. Probate is a formal court proceeding which is required to transfer property legally to our heirs, if certain property is not held in trust or has named beneficiaries. For your children or named beneficiaries to receive your estate after your death smoothly and without delay, the method in which you hold title to certain property will determine whether it will avoid probate.
There are different ways to hold title to your real estate, which dictates the procedures of transferring your property to your loved ones. The gross value of your estate as of the date of your death, will determine the legal procedure that is necessary before your property may pass to your heirs. This includes the fair market value of your real estate, not limited to how much equity you own. Holding title to your real estate as a trustee will result in a smoother transition to your heirs, rather than going through probate. Doing this will prevent an expensive probate for your loved ones. The cost to probate an estate is not limited to attorney’s fees, but also includes court fees and appraiser fees. Also, a probate ties up your property before your family can take ownership, which could take years.
Have you recently refinanced your home and forgot to put your property back into your trust? Make sure you record a new deed to put your property back into your trust to avoid probate.
Did you recently buy a new home or investment property that you forgot to put into the name of your trust? Record a new deed as soon as possible.
Did you inherit the family home or farm or other real estate from your parents or relatives? If you don’t own it as trustee, you can record a deed to put it into your trust.
All of the above examples of ownership can be transferred into your trust to avoid probate.
What happens If you own property in other states? In this case, you will need to open probate in every state where you own property that is not vested in your trust. This becomes very costly, hiring attorneys in each state.
Depending upon the value, your personal property such as cars, motor homes, boats, cash, investments, art, coin collections or anything of significant value can also be probated. If your real estate is probated, the remainder of your estate, including your personal property in all forms, may be added to the gross value of your estate to be probated. If you have named beneficiaries on investments and title slips, such as the pink slips to your motor vehicles or boats, they will NOT be added to the probated estate. Depending on the amount of debt to be paid after your death, some property may need to be probated.
As mentioned above, the gross value of your estate that needs to be probated will determine the type of proceeding that is necessary to transfer legal ownership to another person. The State of California has three types of property values, which determine the type of legal proceeding required to pass your property to your heirs:
The cost of probating your estate is based on the gross value of your estate. Attorneys, appraisers and court costs are based on the gross value as of date of death. The bigger your estate, the bigger the cost to probate.
At IN TRUST LEGAL, we help our clients to avoid probate. We are certified, experienced and affordable. Check your property deed today to see how you hold title and call us if it’s not in your trust.