Probate is the legal process through which a deceased person's assets are distributed according to their will (or state law, if there's no will). While probate is often necessary, it can be time-consuming, costly, and emotionally draining for the surviving family members. Fortunately, estate attorneys can help families navigate and sometimes avoid the probate process altogether. Here are five key ways that estate attorneys can assist families in avoiding probate:
- Creating a Revocable Living Trust One of the most effective ways to avoid probate is through the creation of a revocable living trust. An estate attorney can help you set up a trust, where your assets are transferred into the trust while you are still alive. After your death, the assets in the trust are distributed directly to the beneficiaries without the need for probate. Since the trust is considered a separate legal entity, it bypasses the probate process entirely.
- Joint Ownership of Property Estate attorneys can help families structure joint ownership of property in a way that avoids probate. For example, if two individuals hold property as "joint tenants with right of survivorship," the property automatically passes to the surviving owner upon the death of the other person. This is true for real estate, bank accounts, and other assets. An attorney can ensure that property is titled in a way that avoids probate and facilitates the seamless transfer of assets.
- Beneficiary Designations on Accounts Certain assets, such as retirement accounts, life insurance policies, and bank accounts, allow for beneficiary designations. Estate attorneys can guide individuals to designate beneficiaries on these accounts so that they pass directly to the named individuals upon death, without needing to go through probate. It’s important that the beneficiary designations are updated regularly to reflect changes in circumstances, such as marriage, divorce, or the birth of children.
- Gifting Assets During Your Lifetime Estate attorneys can advise you on strategies to gift assets to your loved ones while you're still alive. By gifting assets, you reduce the total value of your estate, which may minimize the assets that need to go through probate. Some gifts may also qualify for annual gift tax exclusions, which can further reduce tax liability. This strategy can be particularly beneficial for those who wish to distribute wealth while avoiding the time and cost of probate.
- Using Payable-on-Death (POD) and Transfer-on-Death (TOD) Designations In certain states, estate attorneys can help set up payable-on-death (POD) or transfer-on-death (TOD) designations for bank accounts, securities, and other financial assets. These designations ensure that the assets pass directly to the named beneficiary without going through probate. This approach is typically simple to establish and offers an easy way for families to avoid probate on certain assets.
Conclusion
While probate can be a necessary process, it is often burdensome and costly for families. Estate attorneys are invaluable in helping individuals plan ahead to minimize the need for probate. Through tools like revocable living trusts, joint ownership, beneficiary designations, gifting, and TOD/POD designations, estate attorneys can help families avoid the headaches of probate and ensure that assets are distributed efficiently and according to the decedent's wishes.
We can help families avoid probate in Florida. If you're ready to plan, give us a call!
