Probate is the formal court supervised process that is provided by statute to handle a person's estate after their death. During the process, the individual's assets will be identified and collected, their creditors will be paid, and the residue of their estate will be distributed. While it is the default procedure there are provisions that permit an opportunity to bypass the process. Many of these exceptions must be created prior to the decedent's passing, others arise after death.
Wills are subject to probate, however, trust interests pass without formal probate making trusts a more cost-effective and efficient choice. Next, one of the most common forms of pre-probate planning include holding property in a form of joint tenancy; the title may state for married persons, "community property held in joint tenancy" or "community property with right of survivorship." Assets held in this manner are deemed to pass directly to the other tenant(s) "outside" of probate, as if they had always been owned by the survivor(s).
Additionally, planning prior to death may include interests purchased by contract or investment, such as, U.S. savings bonds, life insurance, IRAs, annuities, and retirement plan benefits, provided a beneficiary is designated other than one's estate. Finally, Social Security benefits, life estates, guardianships, custodianships and forms of "pay on death" accounts pass directly.
It is important to consider that while an interest may pass directly to another person, title, such as to real estate or an account, must be intentionally changed to reflect the new status. Further, there will be community property considerations, creditor's rights and taxes which remain to be addressed.
California law provides retrospective devices to change title to assets after death including transfer of assets to surviving spouses or domestic partners, and small estate assets which are commonly used to "collect" accounts, stock ownership and other investments.
It is important to consider that while an interest may pass directly to another person, title, such as to real estate or an account, must be intentionally changed to reflect the new status. It may be necessary to file a petition or affidavit with the court to obtain the actual transfer of title. Further, there will be community property considerations, creditor's rights and taxes which remain to be addressed.