One crucial aspect to consider when planning your estate is how to avoid probate. Probate can be a complex and time-consuming process involving the distribution of a deceased person’s assets under court supervision. The lengthy process often requires the involvement of a probate attorney, which can lead to additional costs and delays.
In this blog post, we will guide you through various strategies to sidestep probate, safeguard your assets, and ensure a smooth transfer of wealth to your beneficiaries.
Probate is a fundamental legal process that is crucial in ensuring the orderly transfer of a deceased person’s assets and estate to their rightful beneficiaries or heirs. You must understand the various aspects of probate to navigate this process effectively.
The probate process typically requires the involvement of a probate attorney, who will guide you through the necessary steps to distribute assets according to the law. A probate attorney is a legal professional who specializes in assisting individuals and families with the probate process.
When someone dies, their estate typically goes through probate, the legal process of administering the deceased person’s assets and distributing them to their beneficiaries or heirs. A probate attorney’s role is to provide legal guidance, representation, and support throughout this process.
Here are some critical aspects of the probate attorney’s duties:
The probate attorney’s fees vary based on the estate size, so minimizing their involvement and avoiding using a probate attorney is in your best interest, if possible.
Many people ask, “How can probate be avoided?” While the probate process is necessary for certain situations, avoiding it can be desirable for many individuals. Getting around probate offers several advantages, including privacy, reduced costs, and faster distribution of assets to beneficiaries.
Here are some effective strategies on how to get around probate.
A revocable living trust is one of the most popular and versatile tools to avoid probate. You can transfer your assets into the trust during your lifetime, designating yourself as the trustee and beneficiary. As the trustee, you retain control over the assets and can manage them as you wish.
Upon your death, a successor trustee you have named takes over the administration of the trust and distributes the assets to the beneficiaries you designated. Since the trust holds the assets, they do not go through probate.
You can directly designate beneficiaries for certain assets, such as life insurance policies, retirement accounts, and payable-on-death (POD) bank accounts. At the time of death, these assets automatically transfer to the named beneficiaries, bypassing probate. Keep the beneficiary designations up-to-date to reflect any changes in your circumstances.
Owning property or financial accounts jointly with another person typically a spouse or family member, and with the right of survivorship can help bypass probate. When an owner dies, the ownership automatically transfers to the surviving joint owner without the need for probate. This strategy is beneficial for real estate assets.
Another way to reduce the size of your estate that is subject to probate is by gifting assets to your beneficiaries during your lifetime. The annual gift tax exclusion allows you to give a certain amount to each individual without incurring gift tax. Giving assets reduces the value of your estate and potentially avoids probate for those specific assets.
In some states, if the value of the deceased person’s estate is relatively small, there may be provisions for a simplified probate process or a small estate affidavit. This procedure allows heirs to claim the assets without formal probate proceedings. The estate may qualify for these less time-consuming and less expensive probate options if it meets specific criteria.
In certain states, you can use a transfer-on-death deed to designate a beneficiary for real estate. The property will pass directly to the named beneficiary upon death, bypassing probate. Aside from real estate, you can also use TOD designations for securities and other investments.
The best trust to avoid probate is a revocable living trust, also known simply as a living trust. This type of trust is one of the most effective estate planning tools for probate avoidance.
Living trusts offer several benefits:
However, it’s essential to consult with an estate planning attorney to determine if a revocable living trust best fits your needs and financial situation.
Now that we’ve answered, “How do you avoid probate?” the next logical question is, “How do you avoid a probate attorney?”
There are several steps you can take as part of your estate planning to minimize the need for legal intervention:
By implementing these strategies and maintaining an up-to-date and comprehensive estate plan, you can increase the likelihood of avoiding the involvement of a probate attorney and ensure a smoother transfer of your assets to your beneficiaries following your wishes.
Real estate is a significant asset that often goes through probate, but there are ways to avoid it:
You can also create a life estate deed, which allows you to retain the right to use and live on the property during your lifetime while designating a beneficiary to inherit the property after your death.
You may structure your bank accounts to bypass probate, such as a revocable living trust, transfer-on-death deed (TOD), and gifts and lifetime giving.
Other strategies include:
Your estate planning attorney can guide you on which strategies best suit your financial situation. With thorough estate planning and the right approach in place, you can significantly reduce or even eliminate the need for probate on bank accounts. This strategy allows your beneficiaries to receive the funds more quickly and efficiently, per your wishes. Additionally, it can save your family the time, money, and hassle associated with the probate process.
Avoiding probate can provide significant benefits for you and your loved ones. By employing strategies such as establishing a revocable living trust, designating beneficiaries, authorizing joint ownership, and updating your estate plan regularly, you can protect your assets and ensure a smooth transfer of wealth to your heirs.
Remember to consult with an experienced estate planning attorney to tailor these strategies to your unique circumstances, safeguarding your estate and leaving a lasting legacy for generations.
If you need help with probate avoidance or any other estate planning matters, contact Tabor Law today. We can help you explore your options, create a comprehensive estate plan that meets your goals, and provide peace of mind knowing your assets are protected. With a well-crafted estate plan, you can ensure the legacy you leave behind is meaningful and enduring.
Get in touch with us today to learn more!