What Steps Are Needed to Include Real Property into the Estate Successfully in CA?

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Always consult a licensed attorney before making estate planning decisions.

Detailed Answer

Under California law, real property will only be distributed according to your estate plan if it is properly titled or devised. There are two primary ways to include real estate in your estate: by placing it into a revocable living trust or by devising it in a will through probate. Below are the steps for each method.

1. Transferring Property into a Revocable Living Trust

Most Californians use a revocable living trust to avoid probate and ensure privacy. Follow these steps:

1. Review Current Title: Obtain the existing deed and confirm ownership form (sole owner, joint tenants, community property). If the property is jointly owned with rights of survivorship, it may not enter your trust estate until after a co-owner’s death.
2. Draft a Grant or Quitclaim Deed: Prepare a deed that conveys your interest to the trustee of your revocable trust. Include the trust name, date of trust, and trustee’s name. You can find sample forms at the California Courts Self-Help Center.
3. Notarize the Deed: Sign the deed before a notary public. California Civil Code §1180 requires notarization for deeds: Civ. Code §1180.
4. Record the Deed: File the notarized deed with the County Recorder’s Office where the property is located. Recording fee schedules vary by county.
5. File a Preliminary Change of Ownership Report: Submit this report to the county assessor within 45 days of recording to avoid penalties. See Rev. & Tax Code §480.2.
6. Update Insurance and Mortgage Lender: Notify your homeowner’s insurance and mortgage company of the ownership change to maintain coverage and comply with loan terms.

2. Devise Property in a Will and Probate

If you choose to pass real property through probate rather than a trust, follow these steps:

1. Include a Specific Devise in Your Will: Clearly describe the property and name the beneficiary.
2. File a Petition for Probate: Submit the petition in the Superior Court of the decedent’s county of residence. See Probate Code §8000: Prob. Code §8000.
3. Provide Notice to Heirs and Creditors: Serve notice as required under Prob. Code §§9100–9160.
4. File an Inventory and Appraisal: List all estate assets, including real property, within 90 days of appointment of the personal representative. See Prob. Code §8800: Prob. Code §8800.
5. Distribute or Sell the Property: After debts and taxes are paid, the court will order distribution per your will, or the property may be sold if necessary to satisfy liabilities.

Helpful Hints

• Always keep a copy of the recorded deed or will with your estate planning documents.
• Transfers into a revocable trust are excluded from property tax reassessment under Prop. 13: Rev. & Tax Code §62 (RTC §62).
• Consider a deed form specific to living trusts to reduce errors.
• Verify county-specific recording requirements online before submitting deeds.
• Consult a qualified estate planning attorney if you have complex assets or multiple properties.