Wednesday, March 23, 2022

Tips To Avoid the Probate Process

Tips To Avoid the Probate Process
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For most people, estate planning is all about making sure their assets end up with the people they care about most. Along with that, you also want to plan your estate in a way that makes the process of distributing your assets as easy as possible.

To that end, most people would prefer to avoid probate. With probate, you have the legal process of distributing one’s assets and making sure all liabilities are settled upon death. Many people think they can avoid probate by having a will and making their wishes clear, but this is not always enough. 

Why People Want to Avoid Probate

You won’t find many people who would be pleased about the prospect of going to probate court. Beyond the unpleasant reality that a person close to you has recently died, it also means you have to deal with what can be a complicated legal process. 

When a probate attorney in Los Angeles was asked about why people try to avoid probate court, she said, “Most people want to avoid probate for several reasons. To start, it is a time-consuming process that will cost money. If you can find a way to avoid it, it will save your heirs time and money after your death, and it will reduce the stress and hassle that can come with probate.”

The probate process can take months or even years. That is a lot of time for your heirs to have to wait for your assets to be released. With court fees and attorney fees, the probate process can also be expensive.

As a final issue, probate is a public legal process. That means it could expose financial issues that the deceased or the heirs would rather have kept private. 

Ways You Can Avoid Probate

Fortunately, the law allows for different options that can allow for the transfer of assets without having to go through the probate process. You just need to think ahead and find the strategy that works best for you and your family.

Joint Ownership

There are several ways joint ownership can help your heirs avoid probate court. If you are married, assets like real estate will automatically pass to your spouse upon death unless you have a will that states otherwise. However, if you are the surviving spouse, you might want to use joint ownership with one of your children to ensure that the property passes to your heir without the need for probate.

If you have a significant other but are not married, something like joint tenancy with the right of survivorship can be a way to make sure the property passes to that individual upon your death. The same can be true if you have a joint bank account with your significant other. If one of you dies, the account would automatically pass to the surviving accountholder in most cases.

Name Beneficiaries for Accounts

You should name beneficiaries for insurance policies and the different types of financial accounts you have. With most accounts for things like savings, retirement and investments, you can register the accounts to pay out upon your death and designate a beneficiary. You should investigate the process and conditions for the different types of accounts you hold, and make sure to keep the beneficiary updated. 

Set Up a Living Trust

Establishing a living trust can be a solution to help your heirs avoid probate. Setting up a trust avoids probate because the assets in the trust are not a part of the estate. The reason it is not a part of the estate is because the assets are held by the trust and not the person who created the trust. You still have control of the assets while you are alive, but it offers a way to get around the probate process.

You would need to hire an attorney to draft a document that creates the trust. Once the trust is established, you have a new legal entity to which the assets can be transferred. You maintain control of the assets and the trust can be revoked at any time. Upon your death, the trustee is then obligated to distribute the assets to the beneficiaries of the trust.

Give Assets Away Before You Die

Another way to avoid probate is to have a smaller estate. Most jurisdictions have limits to the size of estates that go to probate. If your estate is under the limit, your heirs can avoid the process. One way to ensure a small estate would be to give some of the assets away before you die. While this can be a way to help your heirs avoid probate, the downside is that you have to give up legal ownership of the assets before you die. Depending on the value of the asset, it could also trigger gift taxes for the recipient.

It is understandable if you want to avoid probate, but you do need to recognize the fact that there are legal issues at play. If you want to avoid any issues with your estate, you should consult with an attorney.

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