What is the limit to avoid probate in California?

Understanding California’s Probate Threshold: Avoiding Probate for Estates Over $184,500

Probate is a legal process that distributes the estate of a deceased person according to their will or, in the absence of a will, according to state laws. In California, the probate process can be lengthy and expensive, especially for estates with significant assets.

Probate Threshold: $184,500

To avoid probate in California, the estate’s net worth must be below a certain threshold. Currently, this threshold is set at $184,500. If the estate’s net worth exceeds this amount, probate is typically required.

Net worth is calculated by subtracting debts and liabilities from the value of the estate’s assets. Assets include cash, investments, real estate, vehicles, and personal property.

Consequences of Exceeding the Threshold

If the estate’s net worth exceeds $184,500, it must go through the probate process. This can significantly delay the distribution of assets to beneficiaries. The probate process typically takes about nine months or longer, depending on the complexity of the estate.

Avoiding Probate for Larger Estates

If you have an estate that exceeds the $184,500 threshold, there are several strategies you can consider to avoid probate:

• Create a Revocable Living Trust: A revocable living trust allows you to transfer your assets to a trust during your lifetime. The trust can then distribute your assets according to your wishes after your death, without going through probate.
• Joint Tenancy: Joint tenancy is a type of ownership where two or more people hold title to an asset (e.g., real estate) together. When one joint tenant dies, their interest in the asset automatically passes to the surviving joint tenant(s), avoiding probate.
• Payable-on-Death Accounts: Payable-on-death accounts (PODs) allow you to designate a beneficiary who will receive the proceeds of the account upon your death. This can be a useful way to avoid probate for small assets, such as bank accounts.

Conclusion

Understanding the probate threshold in California is crucial for estate planning purposes. By knowing the limit of $184,500, you can make informed decisions about how to manage your estate and avoid the complexities and delays associated with probate. If you have an estate that exceeds this threshold, it is advisable to consult with an estate planning attorney to explore strategies for avoiding probate.