Retiring in California is the dream of millions of people. However, this dream may be derailed when a person dies and their estate passes into probate. For individuals with a large estate, probate can be a useful tool to avoid problems. Probate is a complex process for some estates that can tie up an inheritance for months to years.
What is probate
Probate is a process designed to ensure the fair division of your estate. A complex estate will pass into probate to avoid legal challenges. The process pays your creditors and divides an estate to the specifications of a will. Dying without a will opens up the possibility of probate litigation.
Avoid probate by naming beneficiaries
Probate is a necessary part of estate planning by some people. Retirement accounts do not need to pass through the private system. Naming beneficiaries is part of opening an account with a financial institution. Naming the person you want your retirement accounts to pass to when you die will avoid the need for probate. Your beneficiary claims after your death and the financial institution should make payments until your account is closed.
Who do you name as a beneficiary?
California is a community property state. Your spouse is entitled to any part of your retirement funds added during your marriage. Naming your spouse as your beneficiary will help avoid problems when dividing an estate. Even if you name a child as your beneficiary, your spouse can make a legal claim pushing your retirement account into probate.
Effective estate planning can help speed the process of getting an inheritance paid without the need for probate.