Creating a comprehensive estate plan requires you to do more than just decide how your estate assets will be distributed after your death. Typically, that means your estate plan will include several inter-related goals and objectives, one of which may be probate avoidance. A Huntersville estate planning attorney at Potter Law Firm explains the benefits of avoiding probate so you can better understand why that should be one of your estate planning goals.
When you die, you will leave behind an estate that is made up of all the assets you owned at the time of your death. Probate is the legal process that may be required to transfer those assets to the new owners. In addition, probate serves several other important functions, including:
- Authenticating the decedent’s Last Will and Testament
- Identifying and valuing estate assets
- Notifying creditors and allowing them to file claims against the estate
- Litigating any challenges to the Will
- Ensuring that all taxes owned by the estate are paid
Why Should I Try to Avoid Probate When I Create My Estate Plan?
Many people elect to include probate avoidance strategies in their estate plan because probate can be a lengthy and expensive process. The time it will take an estate to go through formal probate will depend on things such as the size and complexity of the assets involved, the state in which the estate is probated, and the skill and abilities of the Executor. It is not unusual, however, for probate to take a year or longer to reach a conclusion. Probate assets may not be accessible to the intended beneficiaries until the end of that process, providing a powerful incentive to avoid probate. In addition, there are several fees involved in probating an estate, including those for the Executor, appraisers, accounts, and attorneys. Avoiding formal probate (or minimizing the probate estate you leave behind) can allow your estate to avoid unnecessary expenses, reduce the time it takes to distribute your estate, and ensure that assets are immediately available to provide for loved ones.
Probate Avoidance Tools and Strategies
When you create (or update) your estate plan, there are a few common tools and strategies you may decide to use to avoid probate, including:
- Using a trust to distribute assets. Trust assets do not go through probate. Many people, therefore, choose to create a living trust to hold major assets and use the trust terms to distribute those assets after their deaths. If you create a revocable living trust, moving assets in and out of the trust is relatively simple and it ensures that those assets won’t be part of the probate of your estate.
- Reducing the value of your probate estate. Most states offer an alternative to formal probate for small estates. These small estate alternatives are typically quick and simple. Using other probate avoidance tools and strategies, you may be able to reduce the value of your estate assets enough that your estate will qualify for small estate administration.
- Rights of survivorship. Holding property jointly with rights of survivorship is another probate avoidance strategy. When title to property is held that way, upon the death of one owner, his/her interest in the property automatically passes to the remaining owner outside of the probate process.
- Designating accounts as POD or TOD. Most financial accounts offer the option for you to designate them as “payable on death (POD) or “transfer on death (TOD).” This allows you to designate a beneficiary who will automatically become the owner of the account assets upon your death without going through probate. Unlike jointly held assets, however, the beneficiary has no rights to the assets while you are alive.
Contact a Huntersville Estate Planning Attorney
For more information, please download our FREE estate planning worksheet. If you have questions or concerns about the benefits of avoiding probate, contact an experienced Huntersville estate planning attorney at the Potter Law Firm by calling 704-944-3245 to schedule your appointment; our Charlotte, North Carolina office can be reached at the same number. For our Ashland, Kentucky office, call 606-324-5516; our Florence, Kentucky office can be reached at 859-372-6655.
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