The word “probate” is not nearly as scary as it sounds. As long as you know what this is, as long as you know how it will impact your estate plan, it’s possible to make informed decisions that put you and your family in a better position.
So, what is probate? The American Bar Association defines probate as follows:
“Probate is the formal legal process that gives recognition to a will and appoints the executor or personal representative who will administer the estate and distribute assets to the intended beneficiaries.”
As you can see, there is nothing overly complicated about probate. Even so, this doesn’t mean you are in position right now to deal with this situation. Instead, it may take a few changes to put yourself in a better spot.
Generally speaking, there are two types of people who want to learn more about probate:
- Those who are creating an estate plan and want to take steps to help their family avoid probate upon their passing.
- Those who are going through the probate process because a loved one has passed on.
Regardless of your situation, it’s important to learn as much as possible about the probate process. This includes a very important detail: how to avoid probate.
Many people are under the impression that avoiding probate is next to impossible. For this reason, they give in and assume that there is nothing they can do for the better.
But once you learn more about your options, you will find that you are actually in position to make a few decisions that could work in the favor of you and your family.
Here are three of the best ways to avoid probate:
- Create a living trust. In short, this is the best strategy you can implement. When you put property in a living trust, it’s not subject to the probate process upon your death. This is in contract to property that you hold in a will.
- Add beneficiaries on your bank and retirement accounts. Like most, it goes without saying that you have at least one bank or retirement account. Rather than hope that everything works out when you pass on, name beneficiaries on all these types of accounts.
- Joint tenancy. What happens when you decide to hold your property jointly? This is more important than many people believe, as it can help keep your property out of probate.
An example of this would be a couple purchasing a home. When you purchase the home together, with both people’s name on the property, it will automatically pass to the other spouse.
It doesn’t even matter if you are married. When you take this approach you can ensure that the property avoids probate.
Why does it Matter?
If you don’t fully understand the probate process, you may never realize what an avoidance strategy can do for you and those around you.
In short, probate is both time consuming and expensive. So, if you don’t take the right steps today, your loved ones will be faced with various challenges in the future.
When a person passes on, it can be difficult enough to grieve. When you add in the probate process, things become even more difficult. Not to mention the fact that this can drag on for many months or longer.
When you also take into consideration the cost of probate, it’s easy to understand why so many people focus on the strategy that makes the most sense for them.
Are you in the process of creating a will or trust? Are you wondering what this means in regards to probate? If you answered yes to these questions, you need to read our free report entitled Dangers of Do-It-Yourself Wills and Living Trusts.
With this report on your side, you will have a better idea of why you may not want to create your own will or trust. When you do everything on your own, you could be missing out on a strategy that works in your favor.
Probate is a big deal, and you need to know what you can do to avoid this. The steps you take when creating an estate plan will dictate what happens in the future.
- How Estate Planning for a Family May Trap the Unwary Practitioner - September 21, 2022
- What Everyone Should Know about the New FDIC Regulations - September 13, 2022
- The Inflation Reduction Act - September 8, 2022