Tips to Avoid the Probate Process

The purpose of probate is to legally wrap up a person's financial affairs after their death. For those that have not designated a specific individual to control their finances, their estate will go to the court. The court will collect all their property, pay off appropriate debts from that property, and distribute the remaining property according to the specifications of the will.

Bypassing Probate to Distribute Property

Depending on the details of the estate and those seeking to benefit from the deceased's property, probate court can take years to resolve. If an heir is seeking a larger portion of the property than they received, for example, the court will take time to determine if the deceased did not know what they were doing when they drafted their will, they were not mentally capable of changing their will, or if their will was not legally completed.

In many instances, it may be better to avoid probate altogether. Ways to do this are:

  • Name a beneficiary for a retirement account so that all remaining money can go directly to that specific person
  • Establish joint tenancy of property as per the laws of the state to immediately pass property to one person, but be wary of the tax rules that may apply in these instances
  • Gift bonds, bank accounts, stocks, and other securities to a loved one by naming them the pay-on-death beneficiary, which they will only access once the original holder is deceased
  • Gift property to family members before death, understanding that up to $11,000 per year per individual will not be taxed
  • Create a living trust instead of relying on a will and probate
  • Use life insurance as a way to transmit funds and assets to a specific beneficiary outside of probate

Any property that is left to a minor needs to be managed by an adult until the individual turns 18. It may be worthwhile to work with a probate attorney to determine the best ways to leave property to a minor.

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Categories: Estate Planning