As we pointed out in our previous blog post, shepherding a will through probate can take a long time, sometimes years. In addition, if your estate is large enough, it could be subject to extensive taxation. Your heirs could receive less than you wished to leave them.
Most testators want to ensure the process of settling their estates after their deaths to be as quick, easy and inexpensive as possible. Fortunately, the law allows several options that avoid the probate process. Whether these options are good choices depend on the individual, but they are worth considering.
For example, one way to avoid having a piece of real estate go through probate is to arrange to own it jointly with right of survivorship. This means that, upon the testator’s death, the surviving joint owner takes over full ownership. How to go about doing this depends on what your state’s laws require.
Many valuable financial instruments do not pass through probate, while still allowing you to designate a beneficiary to receive the asset upon your death. Retirement accounts like IRA and 401(k) accounts are very useful for this purpose, as are payable on death (POD) accounts.
A revocable living trust is another option. This involves transferring ownership of your property to a trustee, who must use it for your benefit under the terms and conditions of the trust. If the trustee fails to do so, you have the right to revoke the trust. Meanwhile, because you no longer own the property, it does not go through probate when you die. Instead, the trustee may transfer ownership to someone else according to your instructions.
Finally, many testators choose to give away some of their property as gifts before their death. This can be risky, and gift taxes may make larger gifts impractical.
Our readers deserve an estate plan that follows their wishes as closely as possible. A knowledgeable probate attorney can provide valuable assistance.