The cost and time involved with probate can be a lot to handle. Probate also comes with a loss of privacy and control as the court decides how your estate will be distributed. If you are concerned about these aspects of probate, be encouraged that there are actions you can take to reduce or even avoid the process. Here are some tips for making the asset distribution process easier.
Establishing joint ownership of your property is a great strategy to avoiding probate. For example, let us imagine you have joint ownership of your home with your spouse. When you, the first owner, dies, the property will be in the hands of your spouse, eliminating the hassles of the probate process. When you own property with your spouse, it is called community property with the right of survivorship. If you want to have joint ownership with someone else, it is called joint tenancy.
An easy way to avoid probate is giving gifts while you are alive. When you give away property or money when you are alive, it will not be distributed via probate. It is important to remember that probate costs may be higher if you give gifts, especially if you gift high-value assets. There may also be gift taxes and limitations involved.
One way to avoid probate altogether is establishing a living trust instead of a will. When you establish a trust, you oversee your assets while alive and allow for easy transfers to heirs when the time comes. Probate costs are eliminated because the assets put into a trust are appraised and taxed. This is the most clear-cut way to keep your heirs from paying for expensive probate if a trust is right for you.
A trust is a private contract between you and the estate planning entity. You can serve as your own trustee and actively manage your property. This is a distinct advantage over a will, which makes the distribution of your assets public record.
Deciding how to plan your estate can be a confusing process due to the various options available and unforeseeable circumstances. The best way to determine the best course to take is by consulting an estate planning lawyer. A lawyer will help you understand your options to reduce or eliminate probate costs for your heirs. He or she will also advise you on whether a will or trust is best for your particular financial situation and assets.