You spend a lot of time thinking about what will happen to your assets upon your death, among a variety of related details. For example, you may have concerns about the probate process and the impact on your estate and loved ones.
Fortunately, there are strategies you can use to help some or all of your estate avoid probate. Here are a few to consider:
- Create a living trust: Any assets that you move into a living trust are not subject to probate. Instead, the assets in the trust are quickly and efficiently passed on to your heirs upon your death. Furthermore, with a trust, there is a trustee to manage your estate in the event of incapacity.
- Give it away: There is more to this strategy than meets the eye, but the basic premise is exactly what you expect. You gift some of your assets while you’re alive so that they don’t go through probate upon your death. Keep in mind that a federal gift tax may apply.
- Joint ownership: For example, if you own real estate jointly with another individual, such as a spouse, it automatically passes on to the surviving owner. It doesn’t have to go through the probate process.
- Pay on death financial accounts: This is an option to consider with certain types of financial accounts, such as an IRA. With this type of account, you can name someone as your beneficiary. It also provides some protection while you are living, as the beneficiary doesn’t have any legal right to the account until you pass on.
What about a will?
A will is not designed to avoid probate, but that doesn’t mean there are no benefits. For instance, you can use a will to outline your assets and who will receive them. This can help speed up the probate process, while lessening the likelihood of a will contest.
If you think long and hard about the best way to avoid probate, you’re likely to find a few strategies that can work for you and your family. From there, all you have to do is implement them and ensure that everything remains in good standing in the future.