Probate can be a nightmare, and it is something many people wish to avoid. Probate isn’t all bad if you’re able to afford it, but is nonetheless a lengthy process that is oftentimes confusing, even with the help of a probate attorney. If you aren’t able to afford it, or simply don’t want to pay for it, the expenses add up, making it incredibly costly. A common misconception that people have is that you simply need to create a trust to avoid probate, Both trusts and wills can be great, but if you incorrectly manage them, you run the risk of probate. The good news is that there are other documents you can put in place during your lifetime that will lower the chances of your loved ones having to endure this anguish. Below are four common approaches people take to avoid probate and ensure their wishes are carried out.
A person who has a well-managed trust, with all of their assets titled in the name of the trust, can avoid probate entirely. However, this is contingent upon being diligent in titling newly acquired assets in the name of said trust.
By making sure your beneficiary designations are up to date, you are able to avoid disputes between heirs, which can help keep you out of probate. If there are disputes or challenges to the will, a probate attorney will have to get involved.
Jointly Titled Assets
This option makes sense for married couples and commonly refers to bank accounts or major assets. In those cases, the title should be made in the name of both spouses with the right of survivorship. This enables the surviving spouse to absorb assets, with sole ownership, in the event that the other dies. In this scenario, probate is avoided upon the death of the first spouse, however, it does no prevent probate upon the surviving spouse’s death.
Payable-on-Death Designations For Bank Accounts
Rest assured, appointing a payable-on-death (POD) beneficiary for your bank accounts does not affect your finances while you’re alive. A POD beneficiary’s role is to claim that money at the time of your death directly from the bank without having to involve a probate attorney. The advantage here is that there is little to no cost to appoint a beneficiary, and it is generally a quick process that can protect your money in the long run. However, there are disadvantages to consider specific to your circumstance.
Transfer-on-Death Deeds For Real Estate
Similar to a POD beneficiary for your financial accounts, a transfer-on-death (TOD) deed helps your real estate skip the probate process and save you money. This does not take effect until after the property owner’s death and needs to be completed prior to it. At their death, their beneficiary inherits the property without probate proceedings.
Unfortunately, simply having a trust or using any one of these techniques alone to avoid probate is not always enough to skirt the dreaded court process. Avoiding probate is contingent upon revisiting and updating your estate plan throughout your lifetime. Working with a trusted attorney who specializes in probate and estate administration can be especially useful to ensure all of the proper documents are in place. To get started on or update your estate plan, contact our legal office today.