The court-supervised process of distributing a deceased person’s estate or probate can be slow, costly and stressful to your loved ones. It can tie up assets for months or even years, making them inaccessible to your loved ones during a critical time. Probate proceedings are also public, which can expose your family’s financial affairs.
Fortunately, you can use various estate planning strategies to bypass probate while ensuring your assets are transferred to your beneficiaries efficiently, privately and with minimal hassle. Here’s what you can do.
Create a living trust
Transferring your assets to a living trust allows you to maintain control and ownership of your property as the trustee. Upon your death, the successor trustee you appoint will distribute the assets to your beneficiaries according to your wishes without going through probate.
Jointly titled assets
Owning property jointly with the right of survivorship can help avoid probate since the asset automatically transfers to the surviving owner if one of the co-owners dies. As such, your loved ones will not have to wait for the court process to benefit from their inheritance.
Gift assets during your lifetime
Giving away assets while you’re alive eliminates the need for probate. However, be mindful of the tax consequences of exceeding gift tax limits to avoid unexpected financial burdens.
Designate beneficiaries on retirement accounts and life insurance
Retirement accounts, such as IRAs and 401(k)s, and life insurance policies, allow you to name beneficiaries directly. These assets pass to your designated beneficiaries when you die without needing court intervention.
Similarly, you can designate bank accounts and certain financial assets as ‘payable on death.’ This means the funds will be transferred to the named beneficiary upon your death without going through probate.
If you wish to avoid probate or create a more efficient estate plan, consider personalized legal guidance to help you achieve your goals and secure your legacy.