When an individual passes away, his or her estate may go into probate, a process by which outstanding claims are resolved and that individual’s property is divided according to a will. In the probate process, which is overseen by the court, the will may be examined to ensure its validity and its executor is named.
While common, probate is not the best option for everyone. It is avoidable, for the most part, if the right steps are taken. Though estate planning can appear intimidating from afar, up close, it is not so bad and the benefit to you and your loved ones will far outweigh the time and money you put into it.
There are several things you can do to avoid probate.
Take your bank account, for instance. By converting it to a “payable on death” account, you will be able to designate a specific individual to whom its funds will be transferred after your passing. You can also name a beneficiary for life insurance and 401K accounts.
Jointly owning real estate with another person is also a good way to avoid probate. In many cases, individuals will jointly own property with a spouse. Then, in the event of one’s death, that property will just transfer completely to the other party. This is referred to as “joint tenancy, with the right of survivorship.” While this sort of joint ownership is often used by married couples, it can really be used by any two individuals.
“Tenancy by entirety,” on the other hand, may only be used by a married couple.
Another way to avoid probate is to establish a trust, which most estate planning attorneys can help you with.
Of course, even the best laid plans sometimes do not succeed. If you and your family need help with probate administration, an experienced lawyer can ensure that the process is run as smoothly and fairly as possible.
- How to Avoid Probate (Fav Stocks)