Ways to Avoid Probate

Probate is generally about as desirable as a case of shingles.  A legal procedure in which a court validates a will and resolves other estate-related issues and probate is public.  It can also be costly and time-consuming. So do your family a favor: Take steps to avoid, or at least, minimize, probate.

Here are three smart ways to bypass probate without creating a trust:

  • Designate beneficiaries of insurance policies and retirement plans so they can be transferred directly to heirs. If you retirement plan has a 401(k) feature, it can treat these amounts as a pretax benefit.
  • If your financial institution allows it, designate bank and brokerage accounts as “pay on death” or “transfer on death.”
  • Hold title to your home or other real estate with a spouse or child as “joint tenants with rights of survivorship” or “tenants by the entirety.”

* Other rules and conditions may apply.

Creating a living trust has several benefits as well.  Living trust bypass probate, since technically assets you put in a trust are owned by the trustee, not you, so on your death the trustee can transfer your property and assets directly to your beneficiaries.  Be aware that these assets are still taxable by federal estate tax purposes.  You can convert bank accounts, stocks, and certain registrations to be payable-on-death, and join-property can also be transferred directly.  A Living Trust also allows you to manage your assets without having to create a Power of Attorney or Conservatorship, as you would under a Will.  You can also use trust to give away gifts while you are alive (i.e. College Education Trust).

Contact Pierce Firm, PLLC for more information.