Probate is the court process through which a deceased’s estate is distributed. It is usually initiated by your estate’s executor or an administrator. During the process, the court validates your will and authorizes your executor to distribute your estate to your beneficiaries as well as clear any outstanding taxes your estate may owe. If you do not have a will, the court may appoint an administrator who will follow the probate judge’s directives on distributing your property.
Most people try to arrange things to avoid probate, whenever possible.
Why you should avoid probate
It may seem a straightforward affair to gather and distribute your assets and pay taxes, but everything is not as it seems. The probate process can take a long while to wind up — sometimes even years — if it’s complicated or involves a contested will. In addition, the court process can be costly. Attorney fees, executor fees, and other administrative fees are just a few of the costs involved in the probate process, which can get quite expensive.
Probate is also a public affair, given that it’s a state legal proceeding. As such, all materials in the process go into the public record. It may be unsettling to have some revelations made to the public, especially on things to do with your family.
Below are some ways in which you can avoid probate in your estate plans:
Establish a living trust
Assets held in a trust no longer belong to you and can therefore not be the subject of a probate process. Instead, the trustee holds the assets in your place and distributes them per the terms of your agreement.
Make accounts payable on death
Bank accounts with a payable-on-death clause are transferred to the designated beneficiary without going through probate. Shares too can be specified to be transferable on death, while certain states even allow the transfer of real estate.
Own property jointly
For jointly owned properties with the right of survivorship, the death of either owner means the property rights are transferred to the surviving owner without the need of probate.
In conclusion, while there are other ways of avoiding probate, knowing more about the path to take may protect your estate long after you are gone. Well-laid estate plans can secure your lineage for generations to come.