Probate is commonly considered to be a burden on the family of the deceased. While the probate process can be complex, expensive, and stressful; the good news is that there are ways to ensure certain assets avoid the probate process upon your death.
What is Probate?
Testate Probate is the court-supervised process of proving the validity of a Will.
Intestate Probate occurs if someone dies without a Will. There is no need to prove the validity of any estate planning documents, but there is a need to clarify the succession of heirs/devisees for the court.
The probate process also requires an inventory of the deceased’s assets and debts. The estate must use the assets to pay off the debts. After that, an asset that does not already have a beneficiary designated must go through the court’s probate process before it can be distributed to the heirs/devisees.
Probate Is Public
Probate is not a private process. The act of filing documents with the court makes the case and all associated filings public records. The thought of “airing dirty laundry” might be daunting to some families, but there are many methods to avoid probate.
How to Avoid Probate
Primarily, any property that was owned solely in the name of the deceased will pass through probate. However, with the right planning, even those assets can avoid probate.
- Account Beneficiary Designations: Many financial institutions, life insurance policies, and retirement accounts allow the owner to designate beneficiaries of the account while the owner is still alive. After the owner’s death, the account passes directly to the designated beneficiary and avoids probate.
- Real Property Deeds: Similar to account beneficiary designations, many states allow for Beneficiary deeds or Transfer-On-Death deeds. This allows the owner of real property to name a beneficiary who will obtain title to the property upon the owner’s death. The deed gets recorded while the owner is still alive in the county where the real property is located. This prevents real property from going through the probate process.
- Title Assets with Rights of Survivorship: Assets that are owned jointly with the right of survivorship will pass directly to the surviving owner and avoid probate. This is a common way for married couples to hold title to real property and bank accounts.
- Set Up a Living Trust: A living trust is an entity created during your lifetime to hold assets, for the purpose of distributing them after your death. Unlike a Will, living trusts are not usually subject to the lengthy, legal, public, and expensive probate process.
If you want to learn more about how your estate can avoid probate upon your passing, consider meeting with an estate planning attorney.