Probate is the legal process of administering your estate after you are gone. The court-controlled affair involves organizing your assets and paying off your estate’s taxes and debts before distributing them to your heirs per the will.
It may seem a pretty straightforward undertaking, but probate is often fraught with complexities and frustrations. It’s one of those situations that can quickly become chaotic and complicated. First, the probate process involves lengthy court proceedings, excessive paperwork and the likelihood of significant delays in distributing assets to your loved ones.
The good news is that you can employ alternative strategies to help you steer clear of the probate process while allowing you to realize your estate planning goals. Below are some of them.
1. Establish a living trust
By creating a living trust, you can transfer your assets into the trust, effectively removing them from the probate process. You can retain control over your assets during your lifetime, and upon your passing, the trust assets can be distributed to your beneficiaries without the need for probate.
2. Joint ownership of property
Owning property or assets jointly with the right of survivorship can help bypass probate. When one owner passes away, the remaining co-owner automatically inherits the deceased owner’s share without the involvement of probate.
3. Designating beneficiaries
Many financial accounts and insurance policies allow you to directly designate beneficiaries, such as in payable-on-death (POD) or transfer-on-death (TOD) accounts. When you die, the assets can pass directly to the designated beneficiaries without going through probate.
4 Gifting assets to loved ones
You can also sidestep the probate process entirely by transferring ownership of property or assets to your intended beneficiaries before your passing.
Seek the necessary assistance
It helps to learn more about these options to help you choose the most ideal one in your situation. For instance, gifting away assets beyond a certain value can attract taxes, while an improperly funded trust can be revoked. Proper guidance can help you understand everything, avoid costly mistakes and do the most with your estate plans.