Since a deceased person can’t own assets, there has to be a method. By which the estate of the person can be transferred legally to the living beneficiaries. This process is termed as probate. The heirs will have to apply for probate to the court, a process that can take a long time during which they cannot enjoy the estate. If there are complexities or disputes, the probate can even take years and consume a lot of effort and money. Michael E Weintraub esq examines some of the practical ways in which you can avoid probate:
Michael E Weintraub Esq Dispose of All the Property
The easiest but perhaps an extreme method of avoiding. The hassle of probate is to ensure that you don’t own anything. You can give away your assets, including your money to people and organizations you want to support. When you don’t have an estate, there will be nothing. To transfer to your heirs, and there will be no requirement of probate. However, as simple as it sounds, it is virtually impossible to strip your estate of all the assets. Because you need money to survive during your lifetime.
Michael E Weintraub Esq Own Assets Jointly
By having a co-owner of all your property as well as financial assets. You can avoid probate, observes Michael E Weintraub esq. When you pass, the surviving joint holder will be the automatic owner of the assets. However, all accounts must be owned jointly with rights of survivorship and not just as joint owners. However, adding a joint owner can attract gift tax if the value exceeds $15,000 per year as well as the estate tax. In case the joint owner predeceases you. Also, by giving joint ownership of accounts or properties, you cede control. Because the surviving spouse can do whatever he or she wants with the property after you die.
Designating Beneficiaries Can Be Effective, Says Michael E Weintraub esq
You can designate your bank accounts and non-retirement investment accounts on a “payable on death” or “transfer on death” basis. Some states also allow you to use beneficiary deeds to transfer property without the need to probate on your death. You can retain ownership during your lifetime with a life estate deed in some states. And after you die, the property can pass to your intended beneficiaries, avoid probate.
Using a Revocable Living Trust
By itself, a revocable living trust is not sufficient to avoid probate of your estate unless. You have transferred your assets to the trust. The probate becomes redundant because even though you die, the trust continues to live. However, assets not transferred to the living trust will still need to be probated. To be transferred to living beneficiaries, unless their owner is with rights of survivorship or they have been accorded a beneficiary designation.
Conclusion
Even though avoiding probate is desirable, the method that will work best for you will depend on your financial situation and the dynamics of your family. Whatever you do, you should ensure that it becomes easier for your beneficiaries to enjoy your estate without incurring the delay, effort, and cost of probate.