3 Important Reasons to Avoid Probate

With or without a will, estates may have to go through a probate process. Typically, the probate process is used for one of two things. It might certify the validity of a will and the executor’s authority to carry out the wishes in the will. Without a will, the probate process must name an administrator to ensure that assets get distributed fairly and that taxes or other estate debts get paid. Depending upon the circumstances, probate can become a long, drawn-out, and expensive process.

Three Critical Reasons to Avoid Probate

In any case, it’s best to ease or even entirely avoid the probate process by planning well in advance. These are some of the best reasons to avoid or minimize probate:

During this process, none of the estate’s inheritors can touch their inherited assets.
Besides having to wait for a distribution of assets, somebody may have to pay an attorney a considerable amount of money to represent them.
Also, since the court has to make probate records public, the will’s beneficiaries cannot maintain their privacy.

Most families would prefer to get the assets from an estate divided up as quickly as possible. Certainly, they would rather avoid having to pay a lot of funds to a lawyer before they can even claim their assets. Some families would also prefer to keep their affairs as private as possible.

How To Avoid Probate Court After a Loved One Passes Away

Even a will cannot help the survivors entirely avoid a probate court. However, some tools can be used to accomplish this.

Living Trust

With a living trust, the owner of assets is free to use them in any way he or she pleases while alive. After death, a trustee will ensure that there will be a distribution of assets according to the deceased owner’s wishes. Unlike a will, a living trust can be used to avoid probate. It’s a little more complicated to set up, but it can avoid problems later.

Designating Beneficiaries

Some financial investments are handy because the owner can set up beneficiaries. Upon death, these assets will pay directly to those named beneficiaries in the portion initially requested by the deceased owner. Some common examples of these kinds of assets could include life insurance, annuities, and other retirement accounts. In some cases, it may also be possible to set up beneficiaries on other financial instruments like home mortgages.

POD Accounts

A payable upon death or POD account can be used by the owner just like any other bank account while they are alive. However, the account can be set up to include a beneficiary who will have access to the funds in the account upon the first owner’s death. These can serve as a quick way to pass some immediate cash to an heir. However, they aren’t as good for complex estates because they only name the beneficiaries but don’t give any instructions about how to use the money.

Shared Accounts

In simple cases, the owner of an account might simply put the name of a close family member on the account with them. This requires confidence and trust, and it has some of the same drawbacks of a POD account.

Get Help to Avoid Probate

In any case, it’s best to make some plans to ensure that an estate can be distributed quickly, fairly, and privately. There are several ways to do this, but they usually take some work before the owner passes away. It is best to call upon an estate planner for advice.