Planning to leave property or funds to loved ones after your death is a common practice, but it’s not without plenty of headaches throughout the process of finalizing your estate. Property, money, and other assets often become stuck in probate before your loved ones can enjoy the gifts you’ve left for them. This can be a time-consuming and expensive process that turns your well-meaning gift into a frustrating experience for your heirs.
Is it possible to avoid probate? Yes—but you’ll need to learn how and apply the right methods to your estate. Keep reading to learn more about seven proven ways to get rid of probate!
What Is Probate?
When leaving gifts behind for your family or other heirs, planning for a smooth transition of your assets helps your loved ones receive these gifts more efficiently—while also dealing with your loss. Probate can throw a wrench in that smooth process, making it difficult to honor your wishes for the well-intentioned gifts and your heirs.
Probate is the legal process of reviewing and validating a will. During probate, the executor of your estate meets with the court and an estate lawyer to determine the authenticity of your will and distribute the assets of your estate.
While probate can help mitigate disputes over property or final wishes while upholding the intent of your will, it is rarely a speedy process. It can also be costly for your executor to hire lawyers and spend time in court to finalize your estate distribution.
Avoiding probate helps keep your estate from landing in legal limbo after your death. To keep your assets out of probate, here’s what to consider during your estate planning process.
1. Distribute Your Estate Before Death
You don’t have to give away all of your possessions years before you pass away. However, as you think through your estate plan, it can help your property avoid probate to meet with your heirs and finalize legal paperwork while you’re still living.
Don’t think of it as a doom-and-gloom way to live through your final years. Giving away property and assets or setting up funded bank accounts can be a meaningful experience for both you and your loved ones. Share a moment with each of your heirs, then have peace of mind that your estate is in good hands per your final wishes.
2. Create a Living Trust
What is a living trust? It’s an alternative to a will and is one of the best ways to avoid probate for your estate.
When your assets move into a living trust, your estate becomes managed by a trustee. Transferring your assets into a trust distributes them out of your estate, which allows your estate to avoid the probate process.
Work with an estate attorney to set up the trust. They can help you choose the best type of trust for your estate and needs and guide you through selecting your trustee.
Make a wise choice in your trustee selection! Choose a responsible individual to manage your estate through the living trust to avoid probate after your death.
3. Establish Joint Ownership
If you own properties as the sole name on the title, consider establishing joint ownership for these properties. With joint tenancy in place, the surviving name on the title becomes the sole owner after your death.
This is a simple way to keep property assets out of probate. Decide who will receive property as you do your estate planning. Work with your lawyer to legally file updated property titles that reflect both your name and the name of the heir you have in mind for each property.
4. Use Pay-On-Death Accounts
A will helps make your final wishes clear, but it’s also critical to document distributions for individual accounts—and make sure the information on various documents don’t conflict.
Pay-On-Death financial accounts can avoid probate if each account clearly lists your beneficiaries. In many cases, bank accounts, IRAs, life insurance payouts, and other financial accounts require primary and secondary beneficiaries when you open the accounts.
When setting up your will, make sure your final directives match the listed beneficiaries for your accounts. Any discrepancies can lead to probate for these payouts.
5. Use Transfer-On-Death Designations
For vehicles, some real estate, and other types of assets, you can assign a Transfer On Death (TOD) designation. Whether you want to give your car to a loved one or donate it to a nonprofit, using TOD can help that gift stay out of probate court.
Make sure the state where you live allows Transfer On Death (TOD) designation for the assets you want to process in this way. Work with your estate attorney to file a legal TOD as it applies to various estate assets.
6. Use Small Estate Provisions
If you don’t have a significant estate, the law has helpful provisions for small estates. Many states can help your estate skip the probate process if your assets fall below a specific value.
Don’t skip the estate planning process—even if you don’t think you have a lot left to deal with after your death. A simple will and using named beneficiaries can help finalize your estate’s distribution without the probate process.
7. Keep Your Will Up To Date
Your original intentions or wishes today might not be the same as they were when you first created your will. If your assets or income have grown, or your family situation has changed over the years, an out-of-date will is still active until you file a new version.
To avoid any questions about your final wishes and prevent a contentious probate process, keep your will up to date!
Plan Ahead To Avoid Probate
Even though probate won’t affect you after you pass away, the probate process can be a traumatic experience for your loved ones. Help your estate and heirs avoid probate by following these tips!
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