Wondering how to avoid probate? We lay out steps you can take to keep your assets out of probate, and your family stress-free.
When a person passes away, their assets and property may have to go through probate. If that sounds like it’s probably a long and expensive process, you’re right.
So it’s no surprise that probate avoidance is a frequent topic. No one wants their grieving family to suffer more stress.
Thankfully, there are several ways to set up your estate plan to avoid probate, including establishing a trust, naming beneficiaries for your assets, and more.
This article explains the advantages of avoiding probate, and estate planning steps you can take to do so.
Probate is the legal process of distributing your assets to designated beneficiaries. This process also includes verifying a will (if there is one) and paying any outstanding debts or taxes left by the deceased.
The probate process can be lengthy and expensive, lasting for several months or years. So people often wonder about the best ways to avoid probate.
Not everything in your estate has to go through probate. As we discuss in this article, there are ways to avoid having a probate court run your assets through the probate process.
Generally, these are the three categories of assets that won’t have to be probated: (1) assets placed in a trust, (2) jointly owned assets that transfer to the surviving joint owner, and (3) assets that have a valid beneficiary designation (typically insurance policies, retirement plans, etc.).
The most common assets that go through probate are ones that are owned solely in the name of the deceased person. For example, real estate owned solely in the deceased’s name.
The probate process is well-defined by state laws, but many people seek to avoid it for several reasons:
So if you’re asking yourself why avoid probate, think about how the probate process may impact your family once you’re gone.
Differences in state probate laws can lead to variations in the overall process and cost of probate depending on what state you’re in. In some states, probate laws may set limitations on the cost of probate court and attorney’s fees.
State probate laws will also dictate when you can avoid probate entirely. If your estate is below a certain value, state probate laws may allow you to avoid probate altogether or to use a simplified version of the process. States like New York, Florida, Pennsylvania, Ohio and North Carolina all have different requirements for when probate can be avoided or shortened.
Fortunately, there are ways to avoid probate. Here are some of the estate planning tools you can use to keep your assets and property out of probate:
Now let’s look at each of these a bit more in-depth.
The complexity of the probate process can differ case by case. A smaller estate may not even require probate, while a larger estate can lead to complex court proceedings. In either scenario, taking some of these estate planning steps can help minimize the time and money devoted to probate proceedings, which in turn lessens the burden of probate on friends and family.