Settling of personal and financial affairs of a dead person is called probate, and can be managed by experienced lawyers to represent the party in court. People avoid this process because it takes up several months and even years to get over it, and the greater the time, the greater the cost. This will leave the heirs with lesser amount of money than initially allocated by the deceased.
You can opt for four different ways, other than probate, to settle the property between heirs or any other beneficiaries. These comprise of; Death Beneficiaries, Joint Property Ownership, Gifts, and Revocable Living Trusts.
You can appoint a death beneficiary through different financial assets and instruments. After your death, the owner of these properties will be the death beneficiary you selected and it will not remain the part of your estate; hence you will be able to avoid the process of probates completely. Following financial resources can be utilized which will permit you to carry this out:
- Retirement Accounts
- Transfer on Death Registrations
- Payable on Death (POD) Accounts
Joint Property Ownership
‘Right of survivorship’ through this process will let you avoid the probate process upon the death of one of the joint property members because the property passes to the owner who is alive as the deceased do not have the ownership right. States provide different methods through which joint property ownership can take place. A written documentation is needed which outlines; the joint ownership relationship, the right of survivorship, and the jointly held property; to develop forms for joint ownership with survivorship right. Some of these forms are discussed below:
- Community Property
- Tenancy by the Entirety
- Joint Tenancy with a Right of Survivorship
Gifting your property before your death is also a way to avoid probate, which is ignored and overlooked by many people. However, this may require a proper planning with precautionary measure as no one can detect future circumstances. It is usually advised to apply this method only on smaller and inexpensive property because gift taxes are applicable on prized possessions, so make sure the asset is lower than the tax limit.
Revocable Living Trusts
This takes place when transferring of property is done by the owner, to the trustee, to seize it for the owner’s advantage but the owner still has the power to terminate the trust. This concludes that; although the trustee is the actual owner of the property, they have to use it up according to the agreement of the trust for the benefit of the person. The agreement can include the transfer of your property to your family or friends.
After the transfer of the ownership to the trustee, it is no more the part of your estate and thus you can save yourself from the probate process. When setting up a trust, formal documentation needs to be done as per state requirements so the individual needs to ensure such things by your state.
Death will come to all of us. Being prepared for it and saving your family the trouble of complicated legal issues is a rational decision. An experienced estate attorney or probate lawyer will guide you through the process and prevent you from making costly mistakes just to avoid the process of probate.