From an estate planning perspective, informal probate may be better than formal probate, and bypassing the process altogether may be the best approach of all. Yet is avoiding probate a realistic goal?
As a law firm that focuses on estate planning, we would answer that question with a strong “yes.” With smart planning, assets can be placed in revocable and irrevocable trusts. Once titled in a trust, an asset is considered non-probate property. In addition, joint ownership, death beneficiaries and gifts can also be included in a comprehensive estate plan designed to avoid probate. Let’s take a closer look at each of these.
Married couples that have real estate often utilize jointly owned property. For example, a couple might jointly own the title to their home in a tenancy by the entirety or a joint tenancy with a right of survivorship. Upon the death of one joint tenant, the property passes to the other in its entirety. However, estate planning should consider multiple contingencies, such as how the property should transfer in the event of the simultaneous death of both owners.
Payable-on-death accounts also can avoid the probate process. An example might be a bank account with a beneficiary designation. Similarly, named beneficiaries of retirement accounts also bypass probate. Upon the death of the account owner, the account simply passes to the beneficiary.
Finally, retirement planning can go hand-in-hand with estate planning. An individual may want to protect his or her assets from depletion by nursing home costs or Medicaid. Transferring assets to an irrevocable trust might be one solution. Our law firm has extensive experience helping clients to preserve their assets and realize their estate-planning intentions.
Source: FindLaw, “Avoiding the Probate Process,” copyright 2016, Thomson Reuters