Dealing with the death of a loved one is a challenging time, and it is certainly no pleasure dealing with his or her affairs after passing. There are many reasons why a family would want to avoid the probate process when a loved one dies. Probate can drag out the estate settlement for a long time and can be costly. Fortunately, there are steps a person can take in order to help family members avoid the probate process after they die.
There are four ways a person can pass their property to another and avoid the probate process. The first way is through joint property ownership with rights of survivorship. When one of the owners dies, the property automatically passes to the other owner. Financial accounts often allow their owners to select a beneficiary to receive the assets upon their death. These assets are passed to the beneficiary and are not part of the estate.
Revocable living trusts transfer assets to a trustee. The trustee owns the property but must use it for the benefit of the owner who still has the right to revoke the trust. Upon the death of the trust’s creator, the assets are passed based on the instructions that are left. The trustee is the owner of the trust and that property is not part of the estate. Finally, gifting assets before death is a way to avoid probate as well. Strategically using the gift tax exclusion amounts can help a person avoid probate and give their assets away while they are still alive.
Many families wish to avoid probate. This can usually be done with careful planning and advice from an attorney who specializes in the probate process. An attorney understands how assets need to be transferred in order to avoid probate. Having an estate plan in place can help a family make the time after death much easier. Each family has unique estate planning needs and should take the time to draft their unique estate plan.
Source: estate.findlaw.com, “Avoiding the probate process“, accessed on Jan. 1, 2018