The probate process exists to ensure that a deceased person’s wishes are respected, that their legitimate debts are paid, and that their property is distributed systematically in the absence of a will. The probate process can certainly be expensive. Costs might include fees for attorneys, appraisers, and court costs. It can be time-consuming, especially if there is a dispute or some of the estate needs to be liquidated to pay debts. Therefore, most strategies for avoiding probate require some planning ahead. That said, there are a few primary ways to avoid probate:
- Joint Ownership with Right of Survivorship- Consider transferring assets at death. This is a cost-effective and efficient estate planning approach. Most real property can be jointly owned with another:
- Real Estate- married couples
- Property such as cars, boats
- Bank accounts
- Stocks
- Death Deeds- The deed to the property automatically transfers to the heir upon the death of the owner.
- Beneficiary Designations- Transferring an asset to a named beneficiary, without giving the beneficiary any ownership in the asset during your lifetime. For beneficiary designation, you can fill out the forms on your own:
- Life insurance policies
- Retirement plans
- Annuities
- Health savings accounts
- Stock options
- Trusts–
- Irrevocable Trust– The donor does not control the trust once it is established.
- Revocable Trust– The donor can change the terms of the trust while they are alive and can control the trust.
- Living Trusts– Only property within a deceased person’s estate goes through probate. Therefore, transferring someone’s property from their estate and into a trust prior to death avoids probate.
