Probate can be a stressful, time-consuming and expensive part of what is already an emotionally painful time. If you’re looking for ways to avoid probate so your loved ones can receive in a timely fashion what you’ve left for them, keep reading.
When we reach a particular stage in life, it is not uncommon to think about leaving something behind for our children and loved ones when we pass on. After all, our children are our legacy, and everything we do is for them.
No matter how law-abiding or patriotic one is, no one wants to leave a large portion of their estate to the government in probate fees. Yet when there is no proper will or trust set up, your assets may inevitably get tied up in court proceedings.
As a result, your descendants may even have to wait for months or years before they even see a penny of their rightful inheritance.
Why hire Bochnewich law offices? Precisely, to avoid unnecessary fees and headaches of probate in California. Follow the basic tips on ways to avoid probate given below to let your estate fall into the hands of the people you love and trust.
1. Create a living trust
A living trust is like a last will and testament; only it distributes your assets after death. It places your monetary assets or property “in trust”, which are managed by an appointed trustee to the benefit of your designated beneficiaries. Creating a living trust is one of the best and most straightforward ways to avoid probate as well as avoiding the cost of probating a will.
Having a living will is a perfect idea, but it also comes with a drawback, i.e., the cost of probating the will or passing it through the court for processing. The courts usually take their fees from the gross estate in probate. This fee may be as high as 10% of the total estate value. A living trust helps avoid all these fees and hassles of the court.
2. Name your beneficiaries
Designating a will or creating a living trust is an excellent method to safeguard your legacy for your heirs, but you don’t have to do this for every one of your assets. Instead, you can simply name your beneficiaries. It’s one of the best ways to avoid probate, and it’s simple to do.
Many assets allow you to name a beneficiary in the event of your death. This includes assets such as your bank accounts, investments, retirement plans, life insurance policies, pension plans, stocks, bonds, IRA accounts, 401K plans, etc.
All you have to do is get the appropriate forms from the relevant organization and submit them after filling them out.
3. Hold joint property
Holding joint property is another of the ways to avoid probate. When there is another co-owner of your estate, they will automatically inherit the said property after your death, whether it’s your bank account, automobile, or real estate.
While the process is a lot smoother for joint ownership as a married couple, but it is not a necessity. In most cases, the property will ultimately go to the co-owner despite having no marital status.
4. Giving away the property
Another excellent method of avoiding the whole host of issues associated with the transference, probate, or will reading is to transfer your property to your loved ones in your own life. Obviously, you can’t give away everything because you still need to live on it.
However, giving away a significant part of your assets can be a crucial part of your estate plan and one of the best ways to avoid probate.
The main disadvantage to this method is that giving away a part of your estate doesn’t allow you to have a say in it anymore. Legally speaking, only the designated new owner will decide what to do with it. But this issue becomes moot if the beneficiaries are loved ones and trustworthy individuals.
Be sure to keep in mind that if your gift exceeds a certain amount, the federal gift tax may apply, which is quite substantial. Therefore, discover all your options before taking this step.