When you take the time to create a comprehensive estate plan, one of your primary goals is likely to ensure that your assets are distributed according to your wishes. An equally important consideration should focus on how those assets will be passed down after you are gone because the way assets are transferred to loved ones can greatly influence both the timing and complexity of the inheritance process. Assets that are subject to probate may take months or even years to be distributed, while assets that bypass probate can often be distributed quickly and efficiently. With that in mind, the Los Angeles attorneys at Schomer Law Group, APC explain what assets go through probate in California and what assets bypass probate.
Understanding Probate
At the time of your passing, you may own a wide range of assets, including personal property, real estate, business assets, investment accounts, and cash. The entire collection of these assets becomes part of your “estate” for the purpose of probate. California law has an interest in ensuring that all your estate assets are passed on to the appropriate beneficiaries and legal heirs, and that any legitimate creditor claims are addressed. Probate is the legal process through which all these goals are achieved. If you executed a valid Last Will and Testament prior to your death, the individual you appointed as Executor will oversee the probate proceedings. If no Will exists, or if the named Executor is unable to serve, the court will appoint a Personal Representative to administer your estate.
The Probate Process in California
Probate in California typically involves several steps, including filing a petition with the probate court, notifying beneficiaries and creditors, taking inventory of the estate, settling debts, paying taxes, and distributing the remaining assets. If the estate is relatively small, it may qualify for a simplified process that can save time and money; however, for larger estates or estates that involve disputes, formal probate proceedings can become lengthy and costly. California law mandates formal probate in certain circumstances, particularly when the total value of the estate subject to probate exceeds the small estate threshold, which is currently set at $184,500 as of 2025. If the estate includes probate assets that exceed the small estate threshold, formal probate will likely be required. Estates that involve real property, creditor claims, or contested Wills are especially likely to go through the full probate process.
What Assets Are Subject to Probate in California?
Because probate can be expensive and time-consuming, people often incorporate probate avoidance tools and strategies within their comprehensive estate plan. To effectively plan for probate avoidance, it is important to distinguish between assets that are subject to the probate process and those that are not. Assets required to pass through probate are referred to as “probate assets.” Probate assets cannot be legally transferred to heirs or beneficiaries until the probate court authorizes the Executor or Personal Representative to do so. These typically include:
- Real estate titled solely in your name or as a tenant in common.
- Bank or investment accounts titled solely in your name without a designated beneficiary.
- Personal property such as vehicles, jewelry, and household furnishings.
- Business interests or shares in a privately held company not otherwise assigned or designated.
- Any asset you owned individually and did not transfer into a trust or that do not have a designated beneficiary.
What Assets Bypass Probate in California?
Not all assets are required to go through probate in California. Assets are typically considered “non-probate assets” because they are transferred automatically by law or by contract upon your death. Common examples of non-probate assets in California include:
- Assets held in a living trust. When you create and fund a trust, the assets in that trust are governed by the terms of the trust agreement. These assets can be distributed without probate, which is one reason many Californians include a trust in their estate plan.
- Jointly owned property with rights of survivorship. When real estate or other property is owned in joint tenancy or as community property with rights of survivorship, the surviving owner(s) automatically inherit the decedent’s interest in the property upon his/her death.
- Life insurance proceeds. The beneficiary named in the policy will receive the death benefit directly without going through probate.
- Retirement accounts with designated beneficiaries. This includes IRAs, 401(k)s, and similar accounts, provided that beneficiary designations are current and valid.
- Payable-on-Death (POD) and Transfer-on-Death (TOD) accounts. A POD designation allows assets in bank accounts and securities to pass directly to named beneficiaries outside of probate. While similar to jointly owned property, an important difference is that the beneficiary in a POD or TOD account has no ownership interest in the assets while the owner is alive. In California, real estate can be transferred outside of probate using a properly executed and recorded TOD deed.
The Importance of Planning for Probate
Understanding which assets are subject to probate is crucial when creating or updating your estate plan because assets that go through probate are tied up until the court process is complete, which can delay access to much-needed funds for your loved ones. By contrast, non-probate assets are available immediately upon your death, making them a vital part of any estate plan focused on efficiency and privacy. Fortunately, there are numerous tools and strategies available to help reduce the size of your probate estate in California. Working with an experienced estate planning attorney is the best way to decide which tools and strategies work best within your plan.
Can We Help You Understand What Assets Go Through Probate in California?
For more information, please join us for an upcoming FREE seminar. If you would like assistance understanding what assets go through probate in California, contact the experienced Los Angeles estate planning attorneys at Schomer Law Group APCby calling (310) 337-7696 to schedule an appointment.
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