There are several estate planning strategies that you could use to avoid or shorten probate in California. The benefits of a shorter probate are money savings, passing on assets faster and happier beneficiaries.
You can set up various transfer-on-death accounts to avoid probate. In California, you could create transfer-on-death terms for securities, such as stocks, bonds, mutual funds and ETFs. You need to ask your broker for a TOD form and fill it out to assign someone as a beneficiary of your securities.
It’s possible to pass on real estate through a transfer-on-deed too. You need to fill out a TODD form from the county recorder’s office to name a beneficiary.
Payable-on-death bank accounts
Similar to TOD assets, some bank accounts offer a payable-on-death option. You would assign the account beneficiary through the bank’s payable-on-death form.
Both revocable and irrevocable trusts skip probate. They automatically transfer to the assigned beneficiaries when the grantor dies.
Community Property with Right of Survivorship
Married couples opt to own property as Community Property with Right of Survivorship. This would automatically transfer the asset to the surviving spouse. You can convert the property into community property by completing the Community Property Agreement. Once you transform an asset into community property, you can’t change it back without your spouse’s consent.
An alternative to Community Property with Right of Survivorship is joint ownership. You could jointly own property as “tenants in common” or “tenants with right of survivorship.” With tenants in common, you wouldn’t have equal joint ownership. Upon your death, the other owner would receive the designated share based on their ownership. “Tenants with right of survivorship” agreements, however, transfer the entire value to the other owner when you die.
You may not need a will to pass on your bank accounts, real estate or securities. California allows other estate planning options to avoid probate when you want someone to inherit these assets.