Probate is the legal process of sorting out a person’s estate after he or she dies. This process can be many things, including complicated, costly, time-consuming and contentious. But is it also unavoidable?
Given the difficulties that can come with the probate process, there are a range of reasons why a person might not want his or her property to go through this process after his or her death. It is important to know that individuals who want to avoid probate aren’t simply stuck accepting probate as an inevitability. Probate can be avoided. This is because there are certain assets that are exempt from the probate process. Examples include:
- Assets a person gave away before his or her death (as such assets aren’t in his or her estate)
- Assets with beneficiary designations (such as most retirement accounts)
- Accounts with transfer-on-death or payable-on-death provisions
- Assets that are jointly owned with rights of survivorship
- Assets that are jointly owned in a tenancy in entirety
- Assets in a trust that a person put in the trust before death
So, there are a range of planning methods that individuals can use to keep some, or all, of their assets out of probate upon their death. Which methods of turning property into a probate-exempt form would be best suited for a person depends on his or her situation and overall goals.
It is also important to avoid mistakes and misconceptions when taking planning steps to avoid probate. One common misconception some may have is that wills can be used to avoid probate. The reality is that assets distributed by a will are not probate-exempt. So, wills generally aren’t able to help with probate avoidance goals.
So, knowledgeable legal guidance can be a critical thing to have when selecting probate avoidance strategies and taking steps to carry out such strategies.