There is a host of movies called “Dead Men Can’t something.” “Dead Men Can’t Dance,” “Dead Men Can’t Wear Plaid,” and so on. Probate exists because dead men can’t own property.
If you want to avoid an asset going through probate when you die, you need to make sure that legally it belongs to someone or something else before you die.
Probate is the process by which a court ensures assets belonging to you on death are distributed correctly. If you have a will, this determines the distribution. If not, the court will do it according to state laws.
How can I keep assets out of probate?
There are numerous ways to avoid probate. Here are some:
- Move property out of your estate: Use gift allowances to transfer assets before you die. Place property in a trust so that it belongs to the trust, not you.
- Beneficiary designations: Specific assets allow you to designate a beneficiary. When you die, the company in charge of the investment will automatically transfer it to the person you named, avoiding probate.
- Joint ownership: Put things such as the family home or bank accounts into the name of you and your spouse together. It can ensure they automatically become your spouse’s property when you die. An estate planning attorney can help you inscribe them in the correct legal manner.
Probate causes delays in the transfer of your estate. If someone challenges your will, probate could take years. It ties up the assets on which your family may depend. While you cannot always avoid probate entirely, good estate planning can reduce the time, cost and number of assets it ties up. Probate also makes your estate’s details public, so if privacy is important to you, try to avoid it.