If you set up your affairs so that your assets will pass to loved ones without having to go through probate, you can save them considerable time, expense, and work. For that reason, many clients come to us looking for the best strategies to avoid probate.
We usually recommend a combination of options to produce an outcome that will best serve the needs of family members without unnecessary expense or complications. While every plan is tailored to your specific goals and circumstances, here is an overview of some of the tools we employ in probate avoidance strategy and how they work.
The Overall Goal
Since the aim is to avoid having your estate go through probate, we take steps to ensure that property never goes into your estate in the first place. If you leave no estate, then there’s nothing to probate.
When a property is overlooked, it can require opening probate, even for a single item, if the value is great enough. It is a good idea to work closely with your estate planning attorney to ensure that all assets are accounted for in your plan.
Revocable “Living” Trusts
The most useful tool we use to avoid probate is a revocable “living” trust. A trust is an entity that holds property for the use of individuals known as beneficiaries. The property in the trust is managed by a trustee, but the trustee does not get to use the property for their own benefit. People often set up trusts to hold property for minor children who are not legally allowed or mentally prepared to manage the property. The trustee takes care of it for them and distributes assets as needed.
When people establish a revocable trust to avoid probate, they serve as their own trustee and beneficiary. That means they control the property and use it for their own benefit. Even though they transfer official ownership of that property into the trust, they enjoy the benefits just as they did before the property moved into the trust.
Why go to the trouble? The answer is that when the creator of the trust passes away, the ownership of the property passes directly to successor beneficiaries named in the trust. The property never becomes part of an estate, so it is never held up in probate. Loved ones “inherit” property quickly and easily. As a bonus, a revocable trust can be set up to allow a successor trustee to manage the property if the creator and primary trustee become incapacitated.
Another helpful tool to keep property out of probate is to make full use of beneficiary designations where possible. Retirement accounts, for instance, generally allow the owner to designate one or more beneficiaries who receive the assets directly when the owner passes away. The assets never become part of the estate.
Some accounts use a payable on death or transfer on death clause to accomplish the same goal. It is essential to check these designations periodically to ensure that the right individuals are named as primary and secondary beneficiaries.
Joint Tenancy with the Right of Survivorship
A third common tool to keep property out of an estate—and therefore out of probate—is to title the property jointly with a right of survivorship. When two or more people own property titled this way, when one owner passes away, their ownership interest automatically transfers to the other joint owner.
If the property is owned jointly without a right of survivorship, such as in a tenants-in-common arrangement, then an owner’s interest in the property becomes part of their estate when they pass, and it must go through probate to transfer to heirs. An estate planning attorney can ensure that the property is titled correctly to allow it to pass directly to a co-owner.
Salines-Mondello Can Find the Best Probate Avoidance Strategies for Your Family
The experienced team at Salines-Mondello Law Firm, PC has been helping families manage—and avoid—probate for decades. We take the time to fully understand our client’s situations and goals so that we can prepare the right plan to achieve results without wasting time or resources.
We invite you to contact us to discuss how we can help you develop or improve your probate avoidance strategy.