Quick Tips To Avoid Probate
Avoiding probate is a common goal for those establishing estate plans. The probate process is the system through which the assets included in a deceased individual’s estate are distributed according to wishes expressed in the decedent’s will, or through state intestacy laws if no will was created. The transfer of assets through a probate court can result in attorney and court fees as well as other expenses and delays that many individuals wish to avoid. Only assets that do not transfer automatically upon an individual’s death are included in that individual’s estate. As such, setting up assets to transfer automatically upon death can reduce the size of an estate, thus minimizing costs and complexities associated with the probate process. Below are some helpful tips shared in a recent Forbes piece highlighting some of the best ways to utilize an estate plan to avoid probate:
Payable-on-Death Designation: Designating beneficiaries on life insurance policies, retirement, investment, and other accounts, as well as payable-on-death beneficiaries on simple checking and savings accounts will ensure the non-probate transfer of financial assets.
Transfer-on-Death: Indiana and Ohio both allow individuals to set up transfer-on-death beneficiaries on titles to real property and vehicles. Upon the original owner’s death, the transfer-on-death beneficiary will receive such property outside of the probate process.
Joint Ownership: By adding a joint owner to property or financial accounts, assets belonging to the original owner can become the property of the joint owner seamlessly upon the original owner’s death without the involvement of the probate court.
Revocable Living Trust: Some individuals place their assets into a revocable living trust during life. Upon the grantor’s death, assets that have been transferred into the trust will pass to beneficiaries according to the terms of the trust without ever going through probate.
Gifts: Finally, you can reduce the size of your estate by making gifts of property during your lifetime that you would have otherwise made through a will after your death. A smaller estate can result in lower probate court fees and a more timely distribution of your assets after your death.
Although assets passing through the probate process will eventually be distributed according to your will or state intestacy laws if you do not have a will, taking a few fairly simple steps now to ensure that your assets will transfer outside of the probate process can save time, money, and energy for loved ones down the road.