The probate process is not one that is easy to avoid. Most states require a probate proceeding for almost every will. You cannot avoid it, but you can minimize it for those you love. When setting up a comprehensive estate plan, you can look at other methods to deal with your property and money that helps get it where you want it to go quicker. Become familiar with these three ways you can protect your family from having to wait out the probate process.
An excellent fiduciary receptacle many estate lawyers advocate are trusts. These accounts are set up for the benefit of a trustee. The trustee is a beneficiary of sorts and receives whatever is deposited in the trust when the grantor dies. Trusts are excellent for avoiding probate court as they are not included in a will. Once you decide to set up a trust, and you decide what goes in it, you transfer those items out of your name and into the trust. When that happens, they no longer are tabulated under your estate total, reducing tax liability for your heirs as well. During your life, anything you put in a trust is no longer taxable, and it is safe from seizure in the event of a lawsuit.
- Jointly Owned Accounts and Property
When you and someone else own something, it is considered a joint tenancy. These types of arrangements come with a right of survivorship clause. When one of the co-tenants dies, the others receive the deceased’s share. If there are only two people named on a piece of property, for example, and one dies, the other gets full ownership. However, if the document is set up as a tenant in common, this may not be the case. In the same scenario, the deceased’s share may pass to someone named in their will. Joint tenancy is an effective way to keep the property out of probate court unless it is a tenant in common type.
- Life Insurance and Retirement Accounts
A surefire way to leave money directly to heirs is through the utilization of life insurance policies. While these don’t allocate your assets, they do allow for money to pass directly to your beneficiaries. Since you set these up outside of your estate, they remain separate. They do not pass through probate as the money comes from a third party company. Retirement accounts are also probate-proof strongholds. Your designated beneficiaries will receive the disbursement of your money once the bank receives proof of your death.
When the family is waiting for money from probate, it can make things financially difficult. Set up some outside ways they can get cash quickly after you die. Speak with a probate lawyer, like a probate lawyer in Cherry Hill, NJ, to learn more.
Thanks to Klenk Law for their insight into the types of assets that typically avoid probate.