Probate is the process by which a deceased person’s estate is used to pay off the deceased’s debts and taxes, with the remaining assets being distributed to the estate’s beneficiaries. It may seem simple, but probate is actually a fairly complicated and lengthy process. In fact, the American Bar Association estimates that it takes an average of six to nine months to complete probate. You can save your loved ones the time, trouble, and expense of having to go through probate by planning ahead. Here are a few ways to get your estate in order so your loved ones can avoid probate:
Create A Living Trust
Talk to your estate planner about creating a living trust instead of a will. A living trust will transfer all of your assets into a trust, which will be controlled by a trustee (generally you while living, and then someone appointed by you as a successor). Since all of your assets will already be in a trust, there will be no need for your loved ones to go through probate. The trustee that you appointed to manage the trust will then be able to distribute assets to beneficiaries without going through probate.
You should also consider jointly owning property with your spouse or another beneficiary. A joint tenancy is used to avoid probate because it allows the property to be transferred to the surviving owner when the other owner passes away. This means if you jointly own a home with your spouse, the property will automatically go to your spouse after your death. Your spouse will not need to go through probate in order to become the sole owner of the property.
The joint tenant does not need to be your spouse in order for this arrangement to work, so this is an option for both single and married individuals.
Bank Account Beneficiaries
Part of the estate planning process involves naming beneficiaries on all of your bank accounts. Naming a beneficiary is a simple process that involves filling out paperwork and submitting it to the financial institution that holds your accounts. The paperwork will authorize the bank to immediately transfer all of the funds in your accounts to the beneficiary after you have passed away. These are commonly known as POD (Payable on Death) accounts. This is a quick and easy way to help your loved ones avoid the hassle of probate.
Transfer On-Death Registrations
In Indiana, motor vehicles, stocks, and bonds can be automatically transferred to a beneficiary following the owner’s death as long as the proper paperwork has been filled out in advance. The beneficiary will not have to go through probate in order to take ownership of these assets, which will save them time and money.
If you do not need to use certain assets, it may be wise to give them to loved ones as gifts instead of holding onto them for the rest of your life. An asset that is gifted to a beneficiary is no longer part of your estate, so it will not be subject to probate.
It’s recommended that you work with an attorney if you decide to give away some of your assets. You may give away $14,000 per person per year without consequence. Beyond that, each individual can give away up to $5.49 Million during his lifetime or at their death, but such gifts require the filing of a federal gift tax return. An attorney can help you with these details.
These are just a handful of the steps that can be taken to avoid probate. Every estate is unique, so it’s important to work with an estate planning attorney to determine which of these tips you should follow.
To learn more about your options, speak with an experienced divorce attorney today. Our compassionate team of attorneys will ensure that you make the right choice for your family and your future. Contact The Nice Law Firm at 317-269-7311 to schedule a consultation regarding your case.