Should Probate be Avoided?

Many people think probate is something to be avoided at all costs, but is that always true? There are certainly stories about probate dragging on longer than people think it should, repeated court appearances, and expensive fees and costs. That is not always the case, however, and sometimes probate is the very best solution for a family.If the family dynamics are such that siblings are suspicious of each other, or if there is reason to believe an appointed person may be using funds for their own benefit, court supervision may put everyone at ease, and would ensure that assets pass according to the terms of the decedent’s Will. It also guarantees that estate funds are managed in a proper, transparent fashion.

In many cases, however, it is best to avoid the expense and time commitment of probate. Here are some of the strategies to avoid probate, if that makes sense for your family situation:

Establish a Revocable Living Trust

Trusts allow individuals to pass assets to the desired beneficiaries outside of probate. They also allow assets situated in other states to pass without the need for multiple probate actions.Trusts are often funded with real estate (including homes, cabins, and vacation properties), bank accounts, stocks, and business interests. They can be a great tool for pooling all assets so that they can be distributed to your spouse, your children, and/or your favorite charity. Trusts also allow family to have immediate access to assets, which are oftentimes frozen when a probate proceeding has begun. Access to these funds allows the family to pay immediate expenses that come due all too quickly following the death of a loved one, rather than taking the burden on themselves.

Beneficiary Designations

Another way to avoid probate, provided all children have reached the age of majority and the family situation is right, is to be sure all assets have beneficiaries attached to them. Overlooking beneficiary designations is a common, and avoidable, cause of a probate. Ensuring that all assets, including retirement accounts, life insurance, bank and investment accounts, and even real estate if possible, have proper beneficiaries is crucial. If a beneficiary is not designated, your estate may automatically become the “beneficiary” which will require a probate if the account cannot be collected by a small estate affidavit.

Joint Ownership

Couples often assume all of their assets are titled jointly, when in fact this may not be true. Sometimes real estate is accidentally titled as ‘tenants in common’ rather than as joint tenants with rights of survivorship. Or there may be account in one spouse’s name alone. Many presume that everything automatically passes to the surviving spouse, and clients are often surprised to hear that court action is required to transfer a deceased person’s interest in an account, the family cabin, or other assets to the surviving spouse.

Consult with your Estate Planning attorney for more complete information on the best strategy for your family. This information is not intended to be complete, so do not make decisions based on this article without having your attorney evaluate your specific situation.

Contact us today if you have questions about this topic or if we can assist you with your Estate Planning needs. 

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