When you are estate planning, consider what types of assets you plan to pass down to your beneficiaries. The state has specific laws regarding how certain categories of assets are inherited, which can depend on factors such as whether the property is jointly owned.
A knowledgeable probate attorney could help you consider the implications of different types of assets and ownership in Orange County.
Is the Property Co-Owned With a Spouse or Domestic Partner?
It is essential to understand how assets and ownership are categorized to determine if they are subject to probate proceedings in Orange County. When the decedent had a spouse or domestic partner, full or partial asset ownership can depend on whether the property was acquired before the marriage or partnership.
A domestic partnership is legally recognized when the couple has filed a petition of domestic partnership with the Secretary of State under California Probate Code § 37.
Assets subject to probate are generally labeled as community property, quasi-community property, or separate property. Separate property means the assets acquired by a testator or decedent before the marriage or domestic partnership. Additionally, property inherited by an individual during their marriage remains separate property under CA Family Code § 770.
Assets owned by couples are considered community property when they are acquired during the marriage when the couple lived in the state. When the couple acquired the property outside the state during the marriage, it is not automatically considered community property. The probate court will look to the laws of the state where the property was acquired to determine its status, per CA Prob. Code § 28.
According to CA Prob. Code § 66, some assets are also considered quasi-community property. Quasi-community property describes assets acquired while a decedent was living outside the state that would have been deemed community property when purchased while the person was domiciled in the state.
Considerations for Property Jointly Owned With a Third Party
In addition to co-ownership with a spouse, assets jointly owned by a decedent and a third party could avoid Orange County probate when the property was held as joint tenants or tenants in common.
When an individual jointly purchases real property with a third party, they must choose how the deed or title classifies their ownership. Two common types of dual ownership in the state are joint tenants and tenants in common, and the distinction can impact how property transfers upon the death of a joint owner.
Property held in a joint tenancy is generally not subject to probate since a right of survivorship exists for this type of ownership. In this scenario, the property will automatically pass to the surviving joint owner upon the death of a co-owner without probate.
In contrast, individuals holding property as tenants in common do not have a right of survivorship. The co-owner’s portion of the property interest is generally subject to probate approval before it is distributed to beneficiaries.
Spouses can also designate that their real estate is held as community property with a right of survivorship. When the decedent had surviving children, the surviving spouse would still fully inherit such property.
Does the Asset Have a Designated Beneficiary?
Certain Orange County assets and property transfer ownership on death automatically without probate, usually when the deceased person has named a beneficiary.
For example, retirement accounts such as a 401(k) plan and life insurance proceeds are common examples of assets that may not go through probate when the decedent has a named beneficiary. The assets and ownership will generally transfer to the named beneficiary automatically without probate.
Additionally, assets transferred to a legally enforceable living trust are not subject to probate under CA Prob. Code § 15200. These assets will transfer automatically to the named beneficiary or beneficiaries of the living trust without probate.
A lawyer could help provide guidance on how assets and ownership are treated in probate.
Call an Orange County Attorney Today to Consult About Assets and Ownership in Probate
When you are facing a probate proceeding, a lawyer could explain more about the rules for assets and ownership in Orange County probate.
Confusion or disagreements about joint property ownership can lead to lengthy probate disputes when a co-owner passes. Contact a lawyer right away for a consultation.
