If you are thinking about planning your estate, you may want to consider the options available that allow you to avoid probate. Avoiding probate can be beneficial for your estate in a few different ways, but the main reason is saving time and money. Avoiding probate court can be done by establishing a revocable living trust, implementing pay-on-death accounts and registrations, and giving someone joint ownership in property. Almost every state offers some type of short-cut or a way to avoid probate altogether, and this article will review a few different ways you can avoid probate court.
Establish a Living Trust
Living trusts hold property and prevent it from becoming part of the probate estate. A trustee holds the property, and after the death of the owner, the trustee can transfer the property to the designated heirs, avoiding probate.
The living trust has other benefits as well. If created properly, a living trust can help avoid federal estate taxes. In the event the owner becomes incapacitated, the trust allows your appointed manager to take over your assets. Another benefit is privacy, because unlike public probate court, living trusts operate without the need for public exposure.
Payable-On-Death
Payable-on-death accounts are an easy way to keep money out of probate, no matter how much money it is. All you need to do is notify your bank who you want to inherit the money in your accounts, or in any certificate of deposits that you may hold. When you pass, the bank is in charge of making sure your beneficiary receives the money, and this bypasses probate court altogether.
Transferring Title of Property
There are a few forms of joint ownership that provides a way for property to stay out of probate when the owner dies: joint tenancy with rights of survivorship, tenancy by the entirety, or community property with rights of survivorship. The title documents to the property outlines how title is held. No matter how you decide to designate title, this avoids probate because the property automatically transfers upon your death, subsequently avoiding probate.
Joint tenancy can be done with real estate, but it can also be set up with securities, vehicles, bank accounts, or other valuable property. You just need to make certain that you retain survivorship rights, which means that your joint owner does not have any right to sell or transfer their half of the property unless you sign off on the sale as well. Talk to a professional like Cappello George M Lawyer for more information.
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