Probate is the court process that your will must go through before your assets can be distributed to your beneficiaries per your instructions. It involves validating the will, carrying out an inventory of the assets and paying your estate’s outstanding debts and taxes before distributing the remaining assets according to the terms of your will.
Avoiding probate is a goal for many people, as the process can be time-consuming and costly. Fortunately, there are several strategies you can use to bypass probate and achieve your estate planning objectives free of this burden. The following are some worth considering.
Establish a living trust
A living trust is an estate planning tool that allows you to transfer ownership of your assets to the trust while you are still alive. Since the trust is a separate legal entity, the assets it holds are not considered part of your probate estate when you pass away. They can, therefore, be distributed to the trust beneficiaries according to your directives without going through a court process.
Jointly own property
Another strategy that can help avoid probate is jointly owning assets with survivorship rights. When you co-own property with a loved one, its ownership automatically passes to them upon your death and, therefore, distribution of remaining rights does not require probate.
Create payable on death accounts
You can designate beneficiaries for certain financial assets like your bank account, whereby they will receive the funds when you die. Your loved ones will have immediate access to the funds when the time comes without going through probate.
Gift away assets
Giving away assets as gifts during your lifetime can keep them away from probate. A gift to your beneficiary means they are the legally recognized owners and will remain so even after your death.
While these estate planning strategies can help avoid probate, each option should be carefully considered, as it may inspire potentially negative consequences. For instance, there may be tax consequences that you should be aware of beforehand. Seeking legal guidance can help you take informed action and make decisions in the best interests of your legacy and loved ones.
