Is it possible to avoid having your assets go through probate, incurring probate costs?
The short answer is yes, however, it requires you to do some work during lifetime to plan accordingly.
Having a Living Trust
If you create a living trust and fund it appropriately during lifetime, putting all your assets in it, it may be possible to avoid the probate process. Assets put into a trust should be handled and distributed by the trustee according to its terms, without the need of getting the court involved.
Gifting Assets During Lifetime
Some assets are not possible to put in a trust due to their nature. These may include personal items such as jewelry or various collections. A person having a living trust should also have a pour-over will, which is a way of including those smaller personal items in the trust. If, however, you feel more comfortable handling the distribution of certain assets yourself, you may choose to gift certain things to people during your lifetime. This ensures that the assets reach the appropriate person and there is no doubts as to your intent. If you decide to gift larger things or sums of money, speak with an accountant and/or attorney to discuss possible tax ramifications.
Payable on Death Accounts
Certain assets have the possibility of having a payable on death person named. The most common ones include a house, bank accounts, and a car. This means that after your death that person is able to transfer the asset into their name after showing your death certificate (they may need to file something, for example an affidavit to transfer a home). This, however, keeps the asset away from probate and court.
Jointly Owning Property
Another option to avoid probate is to hold as many assets as possible in a joint account with some one else. This means that after one person dies, the other would retain ownership. However, if both parties die at the same time, the asset will need to have a payable on death person designated or it would end up going to probate.
We Can Help
Have more questions on how to avoid probate costs and keep your assets protected? Call Sobon Law, LLC at (216) 586-4246 today!