One of the best things you can do to ease the pain of your passing for the family you leave behind is to make sure that your property and legal affairs are all in order. By making your arrangements in advance with a San Francisco estate lawyer, you can put your mind at ease knowing that your wishes will be fulfilled. At Bassin law in San Francisco,CA, we practice in this area of the law.

How To Plan for Transferring Ownership of Property in San Francisco After You Pass Away

Planning for the transfer of property after death is an essential step in estate planning, ensuring that your assets, including real estate, are distributed according to your wishes. This forward planning also protects your loved ones from unnecessary stresses or financial burdens. If you own property in San Francisco or te surroundin counties in California, you may be concerned about the legal complications relating to transferring property ownership, or possibly the potential for punitive taxes or family disputes.

Though the state of California does not impose an inheritance tax, residents are still subject to federal estate tax, and many of our clients wish to minimize the impact that this tax has on their estate.

How Probate Affects Property Transfer

In California, when a person passes away, their estate generally goes through a legal process known as probate. Probate is the process by which a court oversees the distribution of the deceased’s assets, including real estate, to the beneficiaries. Without a proper estate plan, your property may be subject to probate, which can be a lengthy, expensive, and public process.

Probate can take months or even years, during which time the property may be tied up, preventing beneficiaries from accessing or managing it. In addition, probate comes with legal fees and court costs that can reduce the value of the estate. Therefore, avoiding or simplifying the probate process is a key consideration when planning to transfer property in California. There are several methods to achieve this, depending on your estate size, family situation, and specific goals.

Make a Will

The most basic and common method of transferring property after death is by creating a last will and testament. A will is a legal document that specifies how you want your property and other assets distributed after your death. If you die without a will (referred to as dying intestate), California law will dictate how your property is divided, which may not align with your wishes.

In a will, you designate an executor, the person responsible for carrying out the instructions in your will. The executor will manage your estate, including overseeing the transfer of property, paying any outstanding debts, and distributing assets to your heirs. Your property still has to go through probate, but having a clear will can streamline the process.

Set Up a Living Trust to Avoid Probate

To avoid the probate process entirely, you may want to consider setting up a living trust. A living trust is a legal entity that holds your assets while you’re alive and specifies how they will be distributed after your death. Unlike a will, a living trust does not go through probate. This can save time and money for your beneficiaries.

In a revocable living trust, you maintain control of the property during your lifetime and can make changes to the trust if needed. Upon your death, the property held in the trust is transferred to your designated beneficiaries without court involvement. In San Francisco and throughout California, a living trust is a powerful tool for estate planning, particularly for property owners who want to avoid probate and maintain privacy. Unlike a will, which becomes a public document once it enters probate, a trust remains private, so the details of your estate will not be disclosed.

Use a Transfer on Death Deed (TODD)

Another effective way to transfer property in San Francisco without going through probate is by using a Transfer on Death Deed (TODD). California law allows property owners to use a TODD to name a beneficiary who will automatically receive the property upon the owner’s death. The TODD does not transfer any ownership rights during the owner’s lifetime, so you retain full control of the property. This control includes the ability to sell, lease, or mortgage it.

The key advantage of a TODD is that it bypasses probate, so the property can be transferred directly to the beneficiary without court involvement. It’s also revocable, meaning you can change or cancel the TODD at any time before your death. Additionally, a TODD does not affect your eligibility for Medicaid benefits. To create a valid TODD in San Francisco, you’ll need to complete and file the deed with the county clerk’s office in San Francisco County. It’s important to follow the specific requirements outlined in California law to ensure the TODD is legally binding.

Create a Joint Ownership with Rights of Survivorship

Another option for transferring property without probate is joint ownership with rights of survivorship. In this arrangement, two or more people own the property together, and upon the death of one owner, the remaining owner or owners automatically inherit the deceased’s share of the property. In California, this is commonly used in marital situations, where a husband and wife own property together, but it can be used in other situations, such as if a parent lives with an adult child.

Joint Tenancy with Right of Survivorship

This form of joint ownership ensures that the surviving owners inherit the property upon the death of one owner. It’s important to note that this type of ownership must be explicitly created, as California law presumes tenants in common unless otherwise specified.

Tenancy by the Entirety

This is a specific form of joint ownership available only to married couples, and it includes rights of survivorship. When one spouse dies, the surviving spouse becomes the sole owner of the property.

While joint ownership can be an effective way to avoid probate, it’s important to be aware that joint owners share equal control of the property. If you later wish to sell or refinance the property, you will not be able to do so without the consent of the other owner.

Gift Property Before Death

For some property owners, gifting real estate to beneficiaries before death may be an attractive option. This approach allows you to transfer ownership of the property while you are still alive, avoiding probate and ensuring that your beneficiaries receive the property according to your wishes.

However, gifting property before death can have significant tax implications. For example, if you give property to your heirs as a gift, they may be subject to capital gains taxes based on the property’s value at the time of the transfer.

Consult a San Francisco Estate Lawyer

To understand which of these or other options may work best for your own situation, the most important step is to consult a qualified estate lawyer. When you consult with us, we guarantee an approach that takes your unique situation into account. You can trust us to review your estate and suggest the options that we think will work best to preserve your property and fulfil your wishes.

You should be able to pass your property on as you wish without suffering punitive federal taxes or leaving your heirs with a lengthy probate process. Get in touch with us at Bassin Law in San Francisco, CA to find out more about how our skill with estate law can begin to work for you.