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What is the Probate Process?

Probate is the process of transferring property and legal title from a person who has died to that person’s beneficiaries or heirs. This process can include determining the validity of the will, paying taxes, settling debts, gathering and accounting for assets, and navigating disputes between heirs over inheritance. This process is overseen by probate court.

All of us work hard so that we can leave a little something behind for the people we love so that they are taken care of in our absence. The last thing anyone wants is the government to take a large chunk of this hard earned money with probate fees. We also, would not want our loved ones waiting years before they ever see the inheritance you worked so hard to provide them.

Avoiding the fees and lengthy wait associated with probates is easier than you might think. Listed below are some tips to give more of your hard earned estate to your loved ones as you intended.

Write a Living Trust

Creating a living trust the easiest way to avoid probate. A living trust is an alternative to a Last Will. A Last Will only distributes your assets upon death, whereas a Living Trust places your estate in a Trust that can be managed by a trustee for the benefit of your beneficiaries. In this case, your estate is already distributed to the Trust and, therefore, it will allow you to avoid the probate process entirely.

A Living Trust will also save you the fees and costs associated with the probate process. The cost of moving through probate court to distribute your assets as you intended is one of the main drawbacks of a Last Will. Court fees are taken from the gross amount (the whole amount of the estate before any debts are settled) and this fee can be as much as ten percent. With a Living Trust, you can avoid these fees altogether and this money can be used to better utilized to pay the trustee fees and help cover burial costs

Name beneficiaries on your retirement and bank accounts

A Last Will is often a better fit, for some, because it is a more straightforward document for estate planning. But, just because you have written a will, it doesn’t mean that all your assets will have to pass through probate. Many of our most valued assets allow us to name beneficiaries. In fact, the bank account you opened when you got your first job most likely enables you to designate a beneficiary that is payable on death.

Many people don’t take the time to name beneficiaries for their bank accounts, investments, and retirement plans even though it can be a very simple process. Life insurance policies, pension plans, 401K plans, IRA accounts, and stocks and bonds are all types payable on death accounts.

To get started, all you need to do is to request and fill out the payable on death forms that your bank or brokerage company can provide. If you are married, some of these accounts may automatically be partially owned by your spouse. By taking the time to fill out these forms, you can ensure that the funds are dispersed immediately upon death without having to pass through probate. This will save you, as well as your loved ones, a lot of time any money.

For these reasons, a Last Will can be an excellent alternative to a Living Trust for some.

Joint Tenancy with a Right of Survivorship

Another way to keep your real estate out of probate is holding your property jointly. It doesn’t even matter if you’re married or not. If you are thinking about purchasing a first home or even already own you own house, owning jointly allows the property to pass automatically to your significant other without having to go through probate. Property is designated jointly is going to go to the surviving member of the couple. Make sure you designate this ownership clearly. You may also want to look into Tenancy by the Entirety and, for married couples in Community Property states, you will want to investigate designating co-owned property as Community Property with a Right of Survivorship.

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