Probate court is one of the worst legal experiences you can put your family through. It ties up everything in your estate, preventing them from receiving any money or assets you wanted them to have. It’s costly and can take a year or more. It’s also very easy for the court to determine that your assets need to be sold to pay off your debts, leaving your heirs without a penny at the end! Fortunately, by making use of some estate planning tools, you can protect your estate from probate court. Here are a few ways of doing so.
Realize a Will Does Not Avoid the Probate Process
The first thing to realize is that your will does not stop the probate process. It can shorten it because the court will not need to determine next of kin, but you will still go through probate.
Create a Living Trust
Instead, one of the things you can do is create a living trust. This type of revocable trust will place your assets in what is considered a separate legal entity. You will be a trustee of the trust, controlling the property and making decisions regarding it however you wish. You will also appoint successors to the trust. When you die, the trust automatically transfers to them, skipping the probate process entirely.
Hold Assets Jointly
If you are married or in a long-term relationship, you can hold assets jointly. For example, you can put both of your names on the title to vehicles or to real estate. You will want to make certain that these titles and deeds offer joint tenancy with right of survivorship. Some states also allow you to designate a beneficiary and transfer ownership of real estate or vehicles upon death.
Have Beneficiaries on Your Accounts
In many cases, you can name beneficiaries to accounts such as retirement accounts, investments, and even bank accounts. This works similar to naming beneficiaries for life insurance policies. When you die, the account is passed to the beneficiary.
Need help determining the best way to avoid probate? The experts at Michael F. Kanzer & Associates are here to assist you.