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Understanding Inheritance Law for California Residents

If you have never dealt with California inheritance law before, it can be somewhat complicated to complete an inheritance, even in a situation when a will exists that mentions who gets what.

The following information offers an understanding of what you must do to inherit or settle an estate or trust if a person close to you has recently passed and:

  1. You are the beneficiary in a will or a trust
  2. You are an heir regarding an individual who died and did not have a will or a trust
  3. You are named as an executor of a will or trustee of a living trust

Inheriting Property

There are a variety of inheritance law options for receiving property depending upon the situation. With questions about your situation, please contact one of our knowledgeable attorneys for inheritance legal advice.

Inheritance Law and California Using the Small Estate Procedure

If you are handling the estate of a California resident who passed, and the estate is worth less than $184,500 dollars, you should use an inheritance attorney, however you will not have to go through the long and costly probate court procedure and have a court hearing in front of a judge. Instead, there is a small estates summary probate that can be completed by filing a form and after waiting the appropriate amount of time the assets can be distributed.

Out Of State Seeking Inheritance Legal Advice

On many occasions, families are geographically spread out and seeking inheritance legal advice. Can someone in another state or another part of California hire a Los Angeles inheritance attorney? The answer is yes. Attorney Alice A. Salvo is experienced in counseling clients in other geographic locations and prides herself on prompt and courteous communication.

Does California Have an Inheritance or Estate Tax?

California does not collect an inheritance tax. However, if you are a California resident and inherit real estate from a person who lived in a state with an inheritance tax, you may receive a tax bill for it.

Inheritance Laws Regarding High-Asset Individuals

Some California residents may have to pay federal estate tax, which is a tax on the estate of the person who died, not on the person(s) who inherits the property. There is a $5 million dollar exception, which is tied to inflation and is currently $5.45 million (for 2017).

For people who die with an estate greater than that exemption, an estate tax must be paid. Most people do not have to be concerned because only the wealthiest people fall into this category. Connect with one of our inheritance attorneys to see if your estate qualifies.

If a person dies in the state of California with less than the $5.45 million exemption amount, the estate does not owe federal estate tax or California inheritance tax. All heirs and beneficiaries inherit the property and there is no tax. It is not required for them to pay income tax on it, the reason being inherited property is not considered ordinary income. There is one exception to this on inherited retirement accounts, as the assets are withdrawn income tax must be paid.

Ensure your inheritance is protected from unnecessary taxes, fees or unscrupulous actions that may try to get between you and what is rightfully yours by consulting with a California inheritance attorney.

California Inheritance Law Regarding Probate

Probate is the process of how an estate gets settled by the court. A person, typically the surviving spouse or an adult child, is appointed by the court when there is no will. A person may also have been nominated in the deceased person’s will. The appointed person referred to as an executor or personal representative, has the legal obligation to gather and value all estate assets, pay bills including taxes and to distribute all assets to the heirs and beneficiaries.

For more specific inheritance legal advice, it is recommended you contact our office and speak directly to an inheritance attorney.

Inheriting a House in California

Inheriting a house in California, whether as a named beneficiary in a will or trust, comes with specific considerations under California beneficiary laws. As a community property state, California has unique rules regarding separate and community property that can affect inheritance. If you inherit a house that was considered separate property of the deceased, it typically passes directly to the named beneficiaries. However, in the case of community property, the surviving spouse often has rights that may supersede others.

For those inheriting a house in a trust in California, the process can be more straightforward, as the property can bypass the probate process, leading to a smoother transition. Still, understanding the implications of state law, including potential capital gains tax obligations if you decide to sell the inherited property, is crucial. Selling a house you’ve inherited may result in a significant tax bill, depending on the home’s value at the time of the deceased person’s death compared to when you sell it.

Working with an estate planning attorney can help navigate these complex issues, from understanding your rights under California beneficiary laws to managing bank accounts and other assets associated with the estate. Whether dealing with separate property or assets considered part of the community property, a skilled attorney can offer guidance on how to proceed, ensuring compliance with state law and helping you decide the best course of action, including whether to sell the inherited property and how to address any tax liabilities.

Who Inherits Assets If a Spouse or Parent Dies Without a Will in California?

If a parent or spouse dies without a will, California inheritance law determines who will inherit from the deceased person. Referred to as intestacy laws, these inheritance laws determine who will receive the decedent’s property. “Intestate” describes a person who passes and does not have a will.

With intestate cases, the property typically goes to close family members, beginning with the surviving spouse and children, and then to parents, siblings, nieces and nephews, grandparents and their descendants, and more distant relatives after that. If no relatives exist, inheritance law has the decedent’s property going to the state of California.

Inheritance Legal Advice When A Trust Exists

When an individual has died and previously created a living trust, (also called a family trust or revocable trust) the beneficiaries and details of the distribution of assets may be explained in the document. There is a trust administration process to be done and it is advisable to consult and hire an inheritance attorney to handle all required trust administration duties and prepare proper documents and correspondence.

Hiring a California inheritance lawyer can relieve much of the stress involved with the probate or inheritance process.

If you are looking for answers about your situation regarding which family members are entitled to money, property or related inheritance legal advice, please call us at 818-676-9572 or use our online contact form. Our office offers a free consultation with Alice Salvo, an experienced inheritance attorney.