Probate court is often necessary when someone dies with substantial personal property or many debts in their name. The states worth thousands of dollars or containing real estate typically require oversight by the probate courts. The threshold for probate requirements is actually rather low. Any real estate of any value can trigger oversight, as can an estate with assets worth $25,000 or more.
However, probate proceedings will delay the distribution of assets to beneficiaries and will also consume thousands of dollars in estate assets. Is it possible to eliminate the need for probate proceedings by planning your estate a certain way?
Change ownership of your biggest belongings
One of the simplest ways to keep property out of probate court is to change the ownership of those assets. Some people draft deeds intended to transfer ownership at the time of their death, but there’s always the risk of someone losing such a deed.
You can add someone to the title of your home if they already live with you. By making them a joint tenant with rights of survivorship, you can allow your real property to pass to them without any probate proceedings whatsoever. You can also add transfer on death designations to bank accounts or investment accounts.
For some people, a trust will be a better option, especially if their loved ones do not currently live with them. Changing the official owner of your home and major assets to a trust will ensure that those assets don’t become part of your estate when you die and therefore will not trigger probate proceedings.
Probate can be beneficial
Before you spend significant time and money on the creation of an estate plan with the sole goal of avoiding probate court, you may want to consider whether probate proceedings may benefit your family.
If there is any chance of conflict among your beneficiaries or the possibility of misconduct by the person you need to handle your estate, probate court oversight could help. Having the courts in control of major decisions could prevent misconduct that diminishes your legacy and conflicts among your loved ones that damage their relationships.
Understanding how to avoid probate court with proper estate planning can help you decide what changes may be necessary to pass on the legacy you intend.