Probate is the process by which a court will supervise the administration of an estate when someone passes away. Many clients prefer to avoid probate because the process can be time-consuming and costly. This article will examine the various ways probate can be avoided.
Joint Tenants with Rights of Survivorship. When there are more than one owner to a piece of property, there are different ways the property can be titled. One example is joint tenancy. When a decedent dies while holding property in joint tenancy with another person, the property will pass to the surviving owner by operation of law. This applies for both real estate and personal assets such as a bank account.
Beneficiary Designation/Payable on Death. Many assets such as retirement accounts will allow for a beneficiary designation or payable on death designation to be placed on the account. In this case, when the owner of the account dies, it passes automatically to the beneficiary who is listed on the account. However, the key for this technique is that there must be a valid and living beneficiary at the time of death. If there is no beneficiary listed, the asset will pass with the decedent’s estate, which will most likely trigger a probate proceeding.
Trusts. One of the most common techniques utilized by estate planning attorneys is the use of trusts. Assets held in trust will pass according to the terms of that trust and will not be subjected to the probate court. The important element here is the actual funding of the trust. When a client establishes a living trust, his/her assets need to then be transferred into the name of that trust. Assets that remain in a decedent’s name at the time of death may be subject to probate.