Wills and Probate
When you compose a will, you set down instructions for an executor whose responsibility is to dispose of your assets to your beneficiaries. A will should include instructions for everything you own, including bank accounts, investments, household goods and real estate -- homes, buildings and land. Upon your death, the probate court will review the will to ensure it complies with state law and supervise the actions of your appointed executor.
Many states allow for an expedited probate procedure, depending on the size of the estate. In California, for example, estates valued at $150,000 or less do not have to go through a full hearing and examination in probate court. If there is real estate involved, however, the law requires probate, unless your beneficiaries can avoid it with a Petition to Determine Succession to Real Property. They must also file an inventory and appraisal with the court and schedule a hearing, at which a judge will determine if the law allows for simplified probate.
Trusts and Probate
If you have property to pass on to designated beneficiaries, but would like it to pass without going through the probate process after your death, you can set up a trust, name a trustee and designate the beneficiaries of the property in your will. The property must be re-titled in the name of the trust. If you set up a revocable trust, any income generated by the assets is still subject to income tax. A trust does not necessarily avoid estate taxes but if properly created, will allow your beneficiaries to avoid the time and expense of probate court.
Any property held jointly will, under most circumstances, pass to your co-owner without requiring a probate procedure. This can be real estate, jointly-owned bank accounts or investments, or personal possessions that are, by law, community property. A "joint tenant" who has the right of survivorship takes immediate possession of the property upon the death of the co-owner. If there is no right of survivorship, possession of the decedent's share passes to the rightful beneficiary according to the terms of the deceased tenant's will, or state law if there isn't a will.