When California residents pass away, their family is often left to deal with their personal financial affairs that will still remain after the fact. This is especially true for people who die unexpectedly. Those who die intestate, or without a will, often risk having all of their assets exposed to collection from tax assessors and outstanding creditors. And this is not to mention the legal costs associated with probate. However, this potential predicament can easily be avoided by making certain financial and property designations in an estate plan before the situation can arise.
Transferring property to a trust
One of the most effective methods of protecting property from probate confiscation exposure is transferring property to a trust as part of an estate plan. Most people associate trusts with significant wealth, but they may also be used by those with low to moderate wealth as well. The property effectively becomes a possession of the trustee upon transfer.
Tax-free gifting
Another good method of protecting assets from confiscation by the government is making charitable tax-free contributions. This also should be done prior to death because it lowers court expenses when probate costs are based on the amount of funds assigned for distribution.
Payable-upon-death designations
Another tool that works effectively in avoiding probate exposure is registering an account for immediate ownership transfer at the time of death. This works well in lieu of establishing a joint bank account or some other account that can be claimed by others in the event of the death of one owner.
Even when it is not possible to designate all personal holdings before passing in total avoidance of probate, it is still good to reduce the exposed amount as much as possible. In addition to confiscation protection, this step also helps in allowing for accurate distribution of personal property per the wishes of the decedent.