Avoiding Probate: What To Know
The avoidance of the probate process has increasingly been in the news, which may cause some to believe that wills are a thing of the past. In fact, if there is a will, probate cannot be avoided. You can likely not avoid probate altogether, but you can keep some of your property out of the probate process and thus ensure a quicker and more private way to dispose of your estate. To learn more about how to avoid probate, at least in a limited manner, read on.
1. A trust represents one of the most useful, expedient and comprehensive substitutes for a will that exists. Why not just make a will? Wills must be probated, a process that can take months to complete. This means that the assets of the estate cannot pass to the beneficiaries until the probate process is complete. Additionally, a will is a public document and view-able by anyone with a desire to do so. On the other hand, a trust can do everything that a will can do, without the need to file it in probate court. A trust allows the trustee (who fills a role that is similar to that of an executor) to pass the assets to the beneficiaries as soon as death certificates are available, which normally takes a few weeks. Moreover, the trust is totally private and only the trustee and the attorney know the full contents of the trust. This means that each beneficiary has no way of knowing what the other beneficiary is receiving, unless they want to share that information among themselves.
2. Using payable-on-death and transfer-on-death designations of certain assets can also help you avoid probate, or to even avoid using a trust, if you prefer. This process is fast and easy: just have a beneficiary's name added to the designation at your bank or brokerage account, and the funds go immediately to that person with the presentation of a death certificate. You can have more than one named designation. For example, you might specify that your investment account be divided equally between your three children in the event of your death. Since bank accounts are typically frozen and converted into "the estate of" designations when a person dies, the payable-on-death designation allows your survivors access to needed funds for final expenses as well. Don't be confused by accounts where a designated signer has been added. The ability to sign checks for the account holder ends at the moment of death, without a payable-on-death designation.
To learn more about these, and other methods, to avoid probate, such as the use of quit claim deeds on real estate, contact an estate planning attorney today or go to sites on probate law.
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