Updated on June 29, 2022
Whether or not probate is necessary depends on the nature of the property that is part of the estate, the size of the estate, and whether there is any contest of the estate distribution. In today’s post, we identify certain types of property that are not subject to probate.
An inter vivos trust is a trust established during the lifetime of the trustor. The most common inter vivos trust is a revocable trust. This occurs when the grantor transfers property into the trust for management purposes. Generally, assets held in an inter vivos trust are not subject to probate. However, if there is a contest of the trust, i.e. there is a challenge to the distribution set forth in the trust, the trust may be subject to probate administration.
Multi-party accounts, i.e. accounts with more than one signatory, is governed by the California Multi-Party Account Law. (See Prob. Code § 5100.) The purpose of CAMPAL is to make it easier to transfer property on death without probate, particularly for those with small estates.” To that end, CAMPAL provides methods for establishing, modifying and terminating multi-party accounts. The probate code also codifies several presumptions regarding the nature of funds held on deposit in multiple-party accounts.
As an alternative to probate, the California Uniform T.O.D. (transfer on death) Security Registration Act (the “Act”) provides a method for registering securities and securities accounts so that they may pass outside probate to named beneficiaries upon the death of the owner (or the last to die of multiple owners. (Prob. Code § 550 et seq.) The Act applies to security registrations in “beneficiary form” made at any time by decedents dying on or after January 1, 1999.
Similarly, United States Savings Bonds registered in “beneficiary from” are also not subject to probate on an owner’s death. Instead, title passes outside probate to the surviving co-owner of beneficiary, as the case may be.
Properties held as joint tenancy are not subject to probate because title to the property transfers to the surviving owners by operation of law upon the death of the deceased joint tenant. As a result, probate is not necessary to clear title to properties held in a joint tenancy. For additional information regarding joint tenancies, please refer to our previous post here .
Similar to joint tenancy, property held as a community property for the right of survivorship is also not subject to probate.
Certain contractual arrangements, such as a life insurance policy, or qualified retirement plans are exempt from probate.
Legal life estates and beneficial interests in trust held by the decedent and terminable at his or death are generally not subject to probate.
Schorr Law has experience with resolving probate issues related to probate of real property. To see if you qualify for a free 30-minute consultation regarding your matter, please contact us by phone, email, or send us a message through our contact form.
See related: How to Avoid Probate for Small Estates