Probate is a legal process where a court proves a will to be valid and distributes assets to the appropriate beneficiaries. However, many people are doing what it takes to avoid the entire probate process. Probate often takes over a year to complete and comes with hefty fees. It can also threaten a family’s privacy. Luckily, there are several ways to avoid probate altogether.
One of the simplest ways to avoid probate is to transfer property before you die. If you choose to go this route, understand that you will no longer have use of that property while you’re alive. For example, if you wish to give your vacation home to your sister, it will no longer be under your name.
Pay-on-Death Financial Accounts
It’s generally possible to designate a person as the beneficiary of your financial accounts, such as bank accounts and IRAs, in the event of death. All you have to do is fill out some paperwork at your bank or financial institution. When you die, the funds will be paid to the beneficiary. You can name two or more beneficiaries and the funds will be divided equally among them.
Establisher Joint Ownership for Real Estate
Another way to skip the probate process is to make another person a joint owner of your real estate. When you die, the title will immediately be passed down to the surviving owner. However, understand that there are a few drawbacks to this option. For example, joint ownership could trigger the federal gift tax if the value of the property exceeds a certain amount.
Create a Living Trust
If you have a rather large estate or many beneficiaries, it may be in your best interest to establish a living trust. A trust is more expensive to draft than a will, but it will help you avoid probate. If you have a living trust, you will have complete control of your property while you’re alive. When you die, the person you named as successor trustee will transfer your assets to the designated beneficiaries. The successor can also manage the trust should you become mentally incapacited.
As you can see, there are several ways to avoid the probate process. The option you choose will depend on your financial and family situation. Skipping the probate process will help your family members inherit your property in a shorter amount of time and reduce the fees they have to pay.
If you’re ready to establish or update your estate plan, you should consult with an experienced estate planning lawyer, like a probate lawyer in Folsom, CA. Estate planning can be very complex, and you don’t want to handle it on your own. An estate planning lawyer can help you establish the appropriate plan and answer all of your questions.
Thank you to Yee Law Group, PC for their insight into probate law.