Estate Planning for Real Property
Estate planning is the process of ordering your affairs in anticipation of your death. Planning for the distribution of your property after death is wise.
Keeping Real Property Out of Probate
Several options exist for conveying real property to your loved ones after your death without going through probate court.
Titling Property: If you want your loved ones to have immediate ownership of your real property upon your death, consider including them in some way on the title to your property.Certain forms of property ownership come with a right of survivorship. For example, community property and joint property ownership both automatically give real property to the other owners in the event of your death. A life estate also enables property to convey to another automatically upon your death.
Trusts: Lliving trusts ensure your property is distributed according to your wishes after your death. In a living trust, you would assign someone the responsibility of distributing your property at your death. This someone, known as a trustee, can be a person or a business. During your life time, you would put your real property into the trust for distribution according to your wishes after death. Trusts do not have to go through the probate process, so trust property gets distributed in a timely fashion after your death.
Probate – The Basics
Probate is a process conducted by a state court to distribute your property after your death. Certain types of property avoid the probate process and get distributed directly to heirs, such as life insurance policies, certain bank accounts, gifts, trusts, and certain kinds of joint property ownership. All other property must pass probate to get to your loved ones. Many people plan their estates to avoid probate. While probate ensures that your property is distributed fairly among your loved ones, it is a costly and lengthy process that can delay your gifts to your family and friends.
Real Property in Probate
Wills:Wills speak for you after your death. In a will, you can outline your wishes for the disposition of your real property so that no misunderstandings arise after your death. Wills have certain creation, signature, and witnessing requirements to be valid. Wills must go through probate to ensure validity after which the property in the will is distributed according to your wishes. If your loved ones dispute the distribution of your real property, probate provides forum to address the dispute.
Intestate Distribution: If you die without a will, the probate court will distribute your real property for you. This may even be preferred if you know your loved ones my squabble over your property after your death. The probate court will distribute your real property based on California laws of intestate distribution – laws that distribute your property based on a hierarchical family formula.