Jordan Ciliberto Estate Planning Law Blog on Lawyers.com

Knowing the consequences of probate, and why one
would want to avoid probate proceedings, is an important first step in
counseling clients. The most commonly recognized
estate planning technique for avoiding probate is a revocable living trust,
however, there are a number of other methods for transferring property
without  a will or trust.

Joint Ownership of Property

Real property owned in joint tenancy automatically
passes title to the surviving joint tenant. Property is owned in joint tenancy based
upon the language in the deed. For example, a deed granting property to a
husband and wife as joint tenants would state “Tom Smith and Mary Smith, husband
and wife, as joint tenants.”  There is no
need for the surviving joint tenant to go through the probate court to
effectuate the transfer. There are some simple steps, however, that need to be
taken with the County Recorder’s Office and the Tax Assessor’s Office.  These include submitting an Affidavit of
Death of Joint Tenant and a copy of a certified death certificate.  Bank accounts (including checking, savings,
and brokerage accounts), and vehicles registered with the DMV, can also be held
in joint tenancy.

Similar to joint tenancy is “community property with
right of survivorship.” Holding title in this manner works the same as joint
tenancy.  The deed needs to specifically
state that the property is held as “community property with right of
survivorship.” As with joint tenancy title automatically passes at death to the
survivor, but only married couples or registered domestic partners can hold
property in such a manner. One unique benefit to community property with right
of survivorship is that the entire basis of the property, for income tax
purposes, is stepped up to fair market value as of the date of death. With
joint tenancy only the decedent’s half of the property receives a step up in
basis.

Pay-on-Death Accounts and Beneficiary
Designations

Bank accounts can be
designated as payable-on-death accounts. The institution where the account is
held usually requires a simple form listing a beneficiary of the account. Securities
can also be given a pay-on-death designation. Similarly, IRAs, 401(k)s, and
life insurance policies also have beneficiary designations listing primary and
secondary beneficiaries. At death the assets are simply paid out to the listed
beneficiary without any need for probate or court proceedings.   

Affidavit or Declaration Procedure of
Small Estate Assets

There are specific procedures for collecting personal and real
property assets without a formal probate proceeding if the assets are of small value
and are not titled to a revocable living trust or listed on a beneficiary
designation. These include collecting personal property through an affidavit or
declaration procedure (when the gross fair market value of the decedent’s probate
estate does not exceed $150,000), and an affidavit procedure for collecting
real property that has a gross fair market value not exceeding $50,000 (regardless
of the value of the total probate estate). The personal property affidavit or
declaration procedure can be used to collect money due the decedent, receive
tangible personal property of the decedent, and transfer property that is
evidence of a debt, obligation, interest, right, or security belonging to the
decedent.

Jordan Ciliberto is an attorney at Atack &
Penrose, LLP (http://www.atackpenrose.com/).  He advises clients in real
property and land use issues and assists clients with both simple and complex
estate planning. His practice includes litigation with a focus on estates and
trusts.