Anyone that has been involved in probating an estate can attest to the accompanying frustrations. This court-supervised process can take months, with fees and charges piling up. Meanwhile, whoever is appointed as executor must assume time-consuming responsibilities, adding stress to an already challenging time.
It is no wonder many individuals want to ensure their loved ones do not have to go through this difficult process. Fortunately, with proper foresight and planning, there are steps you can take to minimize the probate court’s impact on your estate.
Common strategies to avoid probate
There is a purpose to probate. Through this process, the court can ensure an individual’s assets are passed to rightful heirs, while also accounting for debts and taxes. If you do no estate planning, most of your property will go through probate.
Fortunately, those looking to spare their loved ones from going through this process have some options. Some tactics often relied upon to help bypass probate include:
- A revocable living trust: Once you place an asset in a trust, you no longer own it – meaning it is not part of your estate
- Joint ownership: If two people own a piece of property, when one of them passes, the other will take full ownership without the need for probate
- Strategic use of beneficiaries: Certain financial accounts can be converted to “pay-on-death” accounts, allowing you to name a beneficiary (which does not require probate)
- Strategic gifting: While giving away valuable assets is risky and can come with tax obligations, this may be a viable strategy for some individuals
Finding the right fit
Some of these tactics will work better for certain individuals than others. It depends entirely on your personal goals and the specific details of your situation. No matter what, however, one rule always applies: You have to plan ahead.
These tools are most effective when prepared in advance. They must be carefully written, tailored to each person’s needs and then scrutinized for any potential issues.
Estate planning is about leaving a legacy. That can include helping loved ones avoid the frustrations of a laborious court ordeal.