Estate plans, including a will and/or trusts, are designed so that your estate can be distributed without assistance or guidance from the state. When you die without a will in California, the state takes over, and it is often a messy and laborious process for those left behind.
In the legal world, dying without a will means dying “intestate.” From then on, the estate becomes a pawn in a legal version of a Choose-Your-Own-Adventure book, with more notably rigid choices.
Estates Without Wills (Valuing $150K+) Go Through California Probate Courts
If your estate’s value is less than $150,000, it may escape probate court, but it becomes a huge headache for whichever relative has to take it on. And, if any potential heirs or beneficiaries disagree with how they handle it, it may wind up in probate anyway.
If your estate is valued at $150,000 or more, it automatically transfers to the county probate court. In short, the probate process serves three main purposes:
- Inventory and value assessment of all properties, assets, financial accounts, businesses, etc., owned by the deceased (referred to as the “decedent”).
- Pay all existing and continuing bills, debts, taxes, related probate fees, and any monies owed until the probate process is complete
- Distribute remaining assets according to the estate plan. If there is no estate plan in place, the estate moves through the probate court, and the court distributes assets and properties following a particular probate standard that determines heirs/beneficiaries.
The state will assign an executor (administrator) to facilitate the process. In most cases, it would be a spouse, a member of the family, or a close family friend (more rarely and only with input from the family). If the family disagrees with the decisions, the state will assign its own administrator to the case, and the estate pays his/her fees. In a smaller or more complicated estate, these fees can wind up being a considerable percentage of the total value.
It is a good idea to hire a probate lawyer who will act as executor and provide sound legal counsel during the proceedings. This will minimize complications, reduce fees and potential penalties, and ease the probate process.
California Probate Follows Intestate Succession Laws
To make things as fair and equitable as possible, California and other states have created their own set of probate laws designed to distribute the deceased’s (decedent) assets in a specific order. These are called intestate succession laws, and there is almost no way around them.
So, let’s say you have a decent art collection. You plan on passing it to your niece, who is an art student. You’ve told her that on many occasions, and she feels so honored to be the beneficiary of something she’s loved her whole life. Then, you die without a will, and the estate moves through intestate succession. Unless someone else in the family knows your wishes and supports them – or believes and wants to honor your niece’s claim – the collection may go to a child or sibling who could care less about the art and more about its value on the collector’s market.
Avoiding intestate succession is one of the most compelling reasons to create an estate plan. We recommend using an Estate Planning Checklist to learn more about what the estate planning process entails.
Assets that Move Through Intestate Succession
Some assets may not need to pass through intestate succession at all, such as those that are co-owned/titled with someone else or financial accounts with “pay on death (POD)” beneficiaries on record. Proceeds from life insurance policies and any properties or assets held in a trust are also immune to intestate succession.
The properties and assets that will move through probate and intestate succession include:
- Any financial accounts, retirement holdings, investments, securities, etc. that do not have named TODs, PODs, or beneficiaries listed, OR if all of the named beneficiaries are deceased
- Properties and vehicles that were owned solely in the name of the deceased person and acquired before a marriage took place (any properties or assets acquired during a marriage pass directly to a surviving spouse in the state of CA unless a will or other legal documents specifies otherwise)
- Shares of any properties or businesses held jointly with someone else (“tenants in common”), so if your deceased mother and a sibling owned property or business together – each with their own share(s) – your mother’s share would move through probate
Nolo.com has succinct descriptions of the intestate succession process and what it means for all relevant heirs and beneficiaries.
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Pay careful attention to those divisions; you can see why dying without a will in California is a very complicated and frustrating experience for your heirs and beneficiaries.
What about blended families and estate plans?
Things get even trickier if you married someone with children who were minors or who you were close to. Having a blended family estate plan is protection from dissension in the ranks after you die. Depending on the ages of the children and then the length of time you were married, they may be included in the intestate succession distributions. Depending on your relationship with them, this may or may not be ideal.
We’ve also had clients who were far closer to their step-children or whose step-children were primary caregivers when biological children were not. Without an estate plan, the ones who stuck by your side or cared most about you can wind up left out if you die without a will in California, and the estate is distributed solely to biological heirs.
Save your loved ones from the stress & heartache of divided estates
Completing legally sound estate plans, including a will or trust, with an experienced attorney is the best way to save your heirs – and those you would like to be your heirs – a tremendous amount of time, energy, and money, not to mention heartache.
For example, keep in mind that inheriting halves or thirds of property means that individuals have to buy the other person out or work together to sell the property and then split the remaining equity after all of the real estate fees have been paid, and so on. The same is true for any other collectibles, heirlooms, or other physical assets that should have been bequeathed in their entirety to keep them in the family.
Tseng Law Firm Can Ensure You Don’t Die Without Estate Plans in Place
One of the best gifts we can give to our loved ones is to create legally sound wills and estate plans so probate remains out of the state’s hands and can be easily facilitated by the chosen trustee and an experienced estate attorney.
Is it time for you to write or update your will and trusts? Schedule a consultation with Tseng Law Firm, one of the Bay Area’s most trusted estate attorneys. We’ll save your heirs and beneficiaries from what can become a horrendous task at such a tender time.