If you have started looking into estate planning topics with the intention of creating or updating your will, you may have realized that avoiding probate seems to be the ambition of many when they plan their estate. Probate is a court-supervised process where a person’s will is administrated. The process is generally considered to be trustworthy, but it is lengthy and costly. This means that your beneficiaries will experience a delay in getting their inheritance, and a significant chunk of their inheritance will be spent on probate costs.
Avoiding probate does not have to be complex, and it will likely prove worthwhile, making a more efficient estate plan. The following are some tips to consider if you would like your estate to avoid the probate process.
Revocable living trusts
The creation of a trust is a common way for estate planners to avoid probate. A revocable living trust is a type of trust where you transfer property to someone else. You have the option to revoke that trust at any time during your lifetime, but if you pass away with the trust in place, the property will not be considered to be yours and will, therefore, not go through probate.
Making gifts during your lifetime to intended beneficiaries is one way to reduce the value of your estate and thereby reduce the number of assets that will be set to go through probate.
Joint property ownership
The joint ownership of assets such as bank accounts will mean that they are automatically in the possession of the surviving owner when one owner passes away.
Some accounts, such as investment accounts and retirement accounts, have the option to set up a “payable on death” (POD) directive. This means that you can name a person whom you want to automatically inherit these accounts without them needing to pass through probate.
If you are starting to plan your estate and you want to make sure that probate is avoided, take the time to understand how the law applies to your situation.