Will My Retirement Savings Go Through Probate?

Probate is the legal process of managing and distributing a deceased person’s estate in accordance with his or her last will and testament, or with the laws of intestate succession. When individuals consult attorneys in Tracy or Manteca to handle estate planning, probate is often a top concern because it can be lengthy and complicated for the surviving heirs. The short answer is that no, your retirement savings won’t go through probate—but there are exceptions, and you should consult your lawyer about them.

Transferring Assets to Beneficiaries

Your estate planning process should include designating beneficiaries for certain accounts, or updating beneficiaries you’ve already designated. These accounts do not pass through probate. All of the assets in them will be transferred to the beneficiary upon your death. Even if your will specifies that your 401(k) will go to your children, if the designated beneficiary is someone else, that person will receive it. For this reason, you should update your beneficiary designations whenever life circumstances change. Of course, if you neglect to designate any beneficiaries, the account will pass into probate.

Designating Alternate Beneficiaries

An alternate beneficiary is someone who will inherit the assets in the event that the primary beneficiary can’t. It’s always good practice to name an alternate beneficiary. Otherwise, those assets will go into your estate and through probate. Hypothetically, Frances and Bernard are a married couple, and they have each left their assets to each other. They both die in a car accident. Lacking alternate beneficiaries, their retirement accounts pass into probate. Their adult children won’t receive those assets until the process is complete.

Naming Your Spouse

California is a community property state. This means that half of the assets you contributed to your retirement account actually belong to your spouse. If you name your spouse as the primary beneficiary, there’s no problem. Otherwise, your spouse could claim those assets, which might force the retirement account to enter probate. If you don’t want this to happen, your attorney can provide a waiver that relinquishes your spouse’s claim on the retirement account. Your spouse would need to willingly sign this waiver.

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