There are many reasons why you might want to avoid probate for your estate. Probate can be time-consuming, often taking months or even years to complete. It can also be expensive, with fees and court costs eating into the value of your estate. Probate is also a public process, meaning that details of your estate become part of the public record.
However, there are several steps you can take to avoid probate and ensure your assets are transferred smoothly to your loved ones. Below are some of them.
Establish a living trust
A living trust allows you to transfer ownership of your assets to the trust while you’re alive. The trust assets or proceeds will be distributed to beneficiaries according to your instructions, avoiding probate. The people you choose will begin to benefit from these proceeds soon after your death without the need for a court process.
Joint property ownership
Owning property jointly with rights of survivorship means that when one owner dies, the property automatically passes to the surviving owner without going through probate.
Gift assets to your loved ones
You can also give your assets to the intended beneficiaries while you are alive. It means relinquishing your ownership rights and handing over the asset to another individual, who now becomes the legally recognized owner.
Setting up payable or transfer on death accounts
You can designate your bank accounts as payable-on-death, where the funds will be transferred to the named beneficiary without probate. Transfer-on-death accounts allow you to designate beneficiaries for securities, vehicles and real estate.
There is no one-size-fits-all approach to avoiding probate. The best method depends on your specific circumstances and unique objectives. Proper guidance on the pros and cons associated with these and other strategies can help you make informed decisions.