Most people strive to leave something behind for their loved ones after they are gone. Unfortunately, a big chunk of the hard-earned wealth can go to the government and other entities in probate fees.
Besides the cost, the beneficiaries have to wait months or even years to benefit from the deceased’s estate.
Luckily, you don’t have to let your loved ones or dependents go through the lengthy and costly process after your demise. “Planning carefully can ensure there’s a smooth transfer of assets and properties to your loved ones,” says Joshua Nelson, an Attorney at Nelson Elder Care Law.
What Is Probate
Probate is the legal process through which properties left behind by the deceased are transferred to their beneficiaries. The process also includes paying off the deceased’s loans and applicable taxes.
Probate is necessary for almost all properties owned by the deceased except for properties legally transferred through state contracts, property titling, or trust laws. Even where the deceased left a written will, the division of property must go through probate. However, where the deceased’s last will is not contested, the process can move significantly faster.
After you are gone, what your loved ones want to do is grieve in peace without worrying about legal processes. The good news is that you can save them the trouble by taking the proper steps beforehand.
1. Write A Living Trust
A living trust is the best alternative for last will and the simplest way of avoiding probate. Unlike a will that dictates how your wealth will be distributed among beneficiaries, a living trust places your property “in trust” managed by a trustee on the beneficiaries’ behalf. Assets held in trust do not go through probate. The best part is the trustee later transfers the property ownership to the beneficiaries.
2. Hold Property in Joint Ownership
Establishing joint ownership of property is also an easy way of avoiding probate. Jointly owned properties with survivorship rights automatically go to the surviving co-owner upon the death of one party.
Any property can be held in joint ownership from real estate, bank accounts, vehicles, and securities. However, if you are holding property in joint ownership to avoid probate, you must make survivorship intentions clear. It is also important to understand your state’s laws around the issue.
3. Set Bank Accounts, Securities, And Other Forms of Property to Transfer Upon Death
Most banks provide an option for naming a beneficiary after your death. If you are concerned about joint ownership, this can be an excellent option for you because the named beneficiary cannot access the funds until after your death. This also applies to non-cash equities such as bonds, stocks, and other securities.
You can also set other properties such as real estate to transfer upon death. However, this option is only available in some states. You may want to consult with your lawyer to establish if this option is applicable in your state.
Death is unavoidable and should be adequately planned to benefit the people left behind. If you are keen on avoiding probate on your property after you are gone, you may want to talk to an attorney and particularly one that specializes in property law.
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