Death can be an awkward topic of conversation and preparing for one’s death can be difficult. A major part of the preparation involves estate planning which protects the assets of the owner of the estate. This planning helps your loved ones avoid the probate process.
What Is The Probate Process?
Probate is the legal process that facilitates the distribution of assets to family and heirs. Your will lists who receives which of your items, for example, you may leave your grandfather’s gold watch to you eldest son. In that case, probate is a necessary process. However, you can eliminate probate altogether in a few different ways:
Option 1: Creating a Living Trust
A living trust is an alternative to a will and can be considered if you want to still appoint assets to certain individuals. When you create a living trust, assets are placed in a trust overseen by a chosen trustee. The trustee then gives the assets to the designated heirs after your passing.
Option #2: Joint Tenancy with Rights of Survivorship
You could hold your property and assets jointly with another person. You don’t have to be married to do this! When you have joint tenancy, property is automatically transferred to the joint owner after you pass away. However, some forms of joint tenancy do not automatically transfer your interest to the other owner. Make sure you discuss a joint tenancy with your estate planning lawyer because if you take the wrong type of ownership, then your assets may still be probated in order for a transfer of ownership to take place.
If you do this, your assets like life insurance policies and bank accounts are payable on death to designated beneficiaries. It is very simple although many people fail to do so. Accounts you can set this up for also include IRA accounts, 401K retirement plans, pensions and stocks and bonds. To name beneficiaries, you’ll have to request a payable on death form from your bank and/or brokerage company. If you don’t do this, your assets must be probated.
Consulting an experienced estate planning attorney is the best way to avoid probate and they can guide you on the various options you have to avoid probate.
Thanks to authors at Smith & Weer P.C. for their insight into Probate law.