When you pass away, your assets, property and everything that composes your estate needs to be dealt with. These things will be distributed to various parties. If you have it your way (by way of a will and trusts) then the probate process can be avoided or largely made irrelevant or painless. But the probate process is something that many people still fear, and for good reason.
Probate cases can be handled quickly, but for the most part, these cases take a long time and can be very arduous. That's why people try to avoid them at all costs. Here are a few other methods you can employ to avoid the probate process:
- A revocable living trust is a fantastic tool that you can use to avoid the probate process. It allows you to transfer your ownership of property and possession to other people. The trust can then dictate how and when those assets are moved on to your beneficiaries.
- Your retirement and bank accounts can be converted into "pay on death" accounts. You want to make sure you go about this conversion properly but, when done appropriately, it can streamline your estate.
- You can also give away some of your property if you have too much and that property thus takes your estate beyond the $5.45 million threshold which triggers federal taxes on your estate. Again, you want to make sure you are compliant with the rules and regulations that apply to giving away property should you choose to go this route.
Source: NerdWallet, "5 Smart Estate-Planning Steps to Avoid Probate," James E. Salter, Feb. 10, 2016