A lot of people are afraid of probate since the complexity it might create to obtain the legal inheritance of the distributed assets as well as the incurring probate court fees. However, it is
possible to avoid probate entirely. In this article, our lawyer team at Dev Smith Nguyen will point out some common approaches often carried out to enable asset distribution without
Why do people want to avoid probate?
This is desirable for some people because doing so not only reduces legal fees, but it can mean avoiding the estate tax, which can take a significant amount of a very wealthy estate. Avoiding probate can also protect privacy, since some of the records may not be available to the public.
How to avoid probate?
One of the most popular ways to avoid probate is through the use of a revocable living trust. Assets are placed in the trust, but they can be used by the trust creator during his or her
lifetime. Upon death, assets in the trust are passed to the trust beneficiaries just by operation of the trust document. No probate is necessary.
The second way is through life insurance. The policies of life insurance enables the property to be passed outside of probate. Whoever you name as beneficiary on your life insurance policy will receive the death benefit directly with no probate process.
Third is retirement accounts which can pass outside of probate. The account owner names a beneficiary and that person then receives the balance of the account after the owner’s death. Payable on death accounts operate the same way.
Last but not least is via the jointly owned real estate. If you have determined the new possessor of your assets after death, you may include them as joint tenants. When the property has two owners and the first owner passes away, the second one automatically owns the property.
However, in general cases, most families will have some contact with a probate court whether or not a will was created as the process is streamlined and inexpensive.