What Assets Do Not Go Through Probate?
Several types of assets pass directly to a beneficiary or co-owner without going through the probate process in California:
- Assets held in a living trust
- Accounts with named beneficiaries
- Jointly owned property with survivorship rights
- Property transferred through a valid transfer-on-death deed
Whether a specific asset avoids probate depends on how it is titled and whether a beneficiary designation is in place at the time of death.
What Assets Are Held in a Living Trust?
Any asset properly transferred into a revocable living trust during the person’s lifetime bypasses probate entirely, since the trust, not the individual, technically owns the asset. This can include real estate, bank accounts, and investment accounts, provided the trust was actually funded with those assets before death. Simply creating a trust document is not enough on its own; the assets still need to be formally retitled in the trust’s name, which is a step some people overlook after signing their estate planning documents.
Do Retirement Accounts Go Through Probate?
Retirement accounts such as 401(k)s and IRAs generally pass directly to the named beneficiary without going through probate, as long as a valid beneficiary designation is on file. If no beneficiary was named, or if the named beneficiary has already passed away, the account may revert to the estate and become subject to probate. This is why reviewing beneficiary designations after major life events, such as a marriage, divorce, or the death of a previously named beneficiary, is an important part of keeping an estate plan current.
What Happens to Life Insurance Proceeds?
Life insurance proceeds pass directly to the named beneficiary and are not part of the probate estate, regardless of the size of the payout. As with retirement accounts, this only holds if a valid, up-to-date beneficiary designation is in place. Life insurance payable to the deceased’s estate, rather than to a named individual, does become part of the probate process.
Are Jointly Owned Bank Accounts Subject to Probate?
Bank accounts held in joint tenancy with right of survivorship generally pass automatically to the surviving co-owner outside of probate. The same is often true for accounts designated as payable-on-death, which name a beneficiary who receives the funds directly upon presenting a death certificate to the bank. This designation is usually available for free through the bank. It can be added to an existing account without an attorney, making it one of the simpler tools available for avoiding probate on cash accounts.
Does Real Estate Always Go Through Probate?
Not necessarily. Real estate held in joint tenancy, as community property with right of survivorship, or transferred through a valid transfer-on-death deed can pass outside of probate. Real estate held solely in the deceased’s name, without one of these arrangements, typically requires probate unless the estate qualifies for California’s small estate procedure, which allows a simplified process when the estate’s total value falls below a state-set threshold.
A transfer-on-death deed has become a popular tool in California because it allows a homeowner to name a beneficiary for real property without giving up any control or ownership rights during their lifetime.
What About Vehicles and Personal Property?
California allows a simplified process for transferring vehicle titles after death in many cases, separate from full probate. Personal belongings of little value are also often handled informally among family members, particularly when the overall estate qualifies for that same small estate procedure rather than formal probate administration.
Even so, disputes can still arise over sentimental or valuable personal items when there is no written record of who was meant to receive what, which is one reason a written estate plan can help even for smaller assets.
Can Community Property Avoid Probate?
Community property held between spouses can often pass to the surviving spouse through a simplified court procedure known as a spousal property petition, though it still requires court involvement.
Why Do Some Assets Still End Up in Probate?
Assets typically end up in probate when:
- The asset is titled solely in the deceased’s name without a beneficiary designation
- A named beneficiary has predeceased the account holder without a backup named
- No living trust was ever created or properly funded
In some cases, a trust exists but was never fully funded, leaving assets outside the trust and therefore still subject to probate despite the family’s original intentions. Reviewing how assets are titled while a person is still living is one of the most effective ways to avoid probate for those specific assets later.
Plan Your Estate to Minimize Probate
Structuring your accounts, property, and beneficiary designations correctly is the most effective way to avoid probate for your estate. Attorney Lisa J. Frisella of Frisella Neilson, APC in San Diego helps clients review their assets and put a plan in place to minimize the probate process for their families. Contact our office online or call 619-260-3500 to talk through your estate planning options.