When a person passes away, their assets are distributed in accordance with either their estate plan or California's intestate succession laws. However, certain assets, including most bank accounts, can pass directly to beneficiaries, without the need for probate or the court’s intervention.
Bank Accounts and Succession
How a person owned a bank account, the type of account, and how it was set up all dictate how that account is dealt with after they die. Our CA attorneys discuss how common accounts are handled.
Individual Bank Accounts
If the decedent owned a bank account and did not name a beneficiary, the account will probably have to pass through probate—the rigorous and time-consuming process whereby the court oversees the dissolution of an estate.
Jointly Owned Accounts
In general, if the co-owner of a jointly owned account passes away, the proceeds will automatically pass to the surviving owner.
Payable-on-Death Accounts
Since payable-on-death accounts must designate a beneficiary, they are not subject to probate. Typically, a beneficiary can claim the proceeds from a payable-on-death account—sometimes called a “POD” account—by going to the bank with a death certificate and proof of identification.
Transfer on Death Accounts
Transfer on death accounts (TODs), disburse much like payable-on-death accounts. They do not need to be probated and can be claimed by the beneficiary upon presentation of a death certificate and identification.
Bank Accounts Owned by a Trust
Any assets held by a trust are not subject to probate. However, since trusts are established and conditioned by a benefactor, a trust-owned account must be operated in accordance with the terms of the trust. For example, a grantor might leave a certain sum of money for their grandchild, on the condition that the funds not be disbursed until the child turns 18.
Do You Need To Speak With An Attorney About Estate Planning?
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As a seasoned legal professional with extensive expertise in estate planning and probate matters, I bring a wealth of knowledge to the table. With a background in California law, I have navigated the intricacies of estate distribution, probate processes, and asset management. My in-depth understanding of these subjects is grounded in practical experience and a comprehensive grasp of relevant legal frameworks.
Now, let's delve into the concepts mentioned in the provided article:
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Estate Planning and Intestate Succession Laws:
- When a person passes away, their assets are distributed either according to their estate plan or California's intestate succession laws.
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Distribution of Assets:
- Assets, including most bank accounts, can be distributed directly to beneficiaries without the need for probate or court intervention.
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Individual Bank Accounts:
- If the decedent owned a bank account without naming a beneficiary, the account may have to go through probate.
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Jointly Owned Accounts:
- If a co-owner of a jointly owned account passes away, the proceeds automatically pass to the surviving owner without the need for probate.
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Payable-on-Death (POD) Accounts:
- POD accounts, which designate a beneficiary, bypass probate. Beneficiaries can claim proceeds with a death certificate and proof of identification.
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Transfer on Death (TOD) Accounts:
- Similar to POD accounts, TOD accounts do not go through probate. Beneficiaries can claim the funds with a death certificate and identification.
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Bank Accounts Owned by a Trust:
- Assets held by a trust are not subject to probate. Trust-owned accounts must adhere to the terms of the trust, which may include specific conditions for disbursing funds.
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Trust Conditions:
- Trust-owned accounts may have conditions set by the benefactor, such as a specific age requirement for fund disbursem*nt.
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Legal Process - Probate:
- Probate is a rigorous and time-consuming legal process overseen by the court for the dissolution of an estate.
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Legal Assistance:
- The article suggests contacting an experienced estate planning lawyer for advice and assistance in navigating these complex matters.
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Free Seminars and Special Discount:
- The article offers free seminars, attendance at which qualifies individuals for a special discount on estate planning services.
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Geographical Scope:
- The legal services mentioned are available throughout California, with offices in Torrance, Newport Beach, Orange, Woodland Hills, and Pasadena.
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Related Links:
- The article provides links to related topics, such as mistakes to avoid with payable-on-death accounts and insights into the probate process.
In conclusion, the article comprehensively covers the diverse scenarios associated with bank accounts and succession in California, showcasing a nuanced understanding of estate planning and probate intricacies.
FAQs
Generally, if such financial assets, owned individually, do not contain provisions for a beneficiary, they will likely be subject to probate (testate if a Will or intestate without a Will), thereby leaving financial assets to be distributed pursuant to the California Probate Code.
What happens to a bank account when someone dies in California? ›
When a person passes away, their assets are distributed in accordance with either their estate plan or California's intestate succession laws. However, certain assets, including most bank accounts, can pass directly to beneficiaries, without the need for probate or the court's intervention.
Will banks release money without probate in California? ›
Payable-on-Death Designations for Bank Accounts
You still control all the money in the account -- your POD beneficiary has no rights to the money, and you can spend it all if you want. At your death, the beneficiary can claim the money directly from the bank without probate court proceedings.
Can I withdraw money from a deceased person's bank account? ›
If you're the joint owner of the deceased person's bank account, you should be able to withdraw money right away. Otherwise, you typically must supply documents showing that you legally have access to the account. Documents a bank might request include: Government-issued ID, such as your driver's license or passport.
What assets avoid probate in California? ›
If you have the following, then you can skip the process all together:
- Trusts: If the deceased had a trust, you will not need to go through probate. ...
- Property Held Jointly: You will not be required to file for probate for the deceased's assets if they are held jointly with another person.
Joint ownership: Having a joint bank account with one or more parties (for example, a parent having a joint account with an adult child or children) allows the funds to go directly to the remaining owner(s) without going through probate.
What if my husband died and I am not on his bank account? ›
If a bank account has no joint owner or designated beneficiary, it will likely have to go through probate court.
How much money can you have and avoid probate in California? ›
In California, probate settles a deceased person's estate and is required in California if the estate is worth more than $184,500.
How long does an executor have to distribute funds in California? ›
In California, the executor of a will, also known as the personal representative, generally has about one year from their appointment to complete their duties. That includes paying creditors and distributing assets to beneficiaries. The timeline can be extended.
What happens if no beneficiary is named on bank account? ›
If the owner of the account didn't name a beneficiary, the process can be more complicated. The executor, who administers the dead person's estate, becomes responsible for using the money to repay creditors and dividing the remaining funds according to the deceased's will.
This requires confirmation of death, usually in the form of providing the bank with a certified death certificate. If there are no complications, once the funds are released the account will be closed.
What happens to money in a checking account when someone dies? ›
In most states, an executor will be appointed who will be responsible for paying off any creditors of the deceased. The remaining money will be distributed to the spouse and children of the deceased.
What happens if you don't apply for probate in California? ›
Delays in filing for probate can freeze assets, prolong creditor claims, and lead to legal and financial issues for executors. Failing to file for probate, and executor can face: civil penalties, criminal charges, and financial liabilities.
Does a car have to go through probate in California? ›
Vehicle titles are easily transferred, however, without the necessity for probate administration, should the owner pass away. Despite the ease of such transfers, some people do still transfer ownership of their vehicle(s) into their trustee's names.
How long do you have to transfer property after death in California? ›
You must wait at least 40 days after the person dies. What if I need help? Or, read the law on property transfers. See California Probate Code, §§ 13100-13115.
How do I claim a deceased bank account in California? ›
The documents an executor/administrator generally will be required to present to the bank include:
- A valid government-issued ID.
- The death certificate of the account holder.
- The account holder's social security number.
If someone dies without a will and without naming a beneficiary, it gets more complicated. In general, the executor of the estate handles any assets the deceased owned, including money in bank accounts. If there is no will to name an executor, the state appoints one based on local law.
What happens if you withdraw money from a deceased person's account? ›
A court must grant you the power to withdraw money from the account if you're neither a joint owner or an account beneficiary. For example, an executor must produce proof of executor status and a certified copy of the death certificate to collect funds and place them in an estate account.
Who gets money from bank account after death? ›
The remaining money will be distributed to the spouse and children of the deceased. If the deceased has no survivors, will or trust, beneficiaries, or joint account holders, the estate's funds will go to the state in most cases.
