A person’s assets are theirs only until death, and at that point it has to go somewhere. Oftentimes, people want to keep their assets within their bloodline upon their death. With proper planning, such desires can be attained, and privacy of such assets can also be had. If a decedent fails to properly plan ahead, their assets have the chance of being tangled in a prolonged legal process which can be stressful and costly.
What is Probate?
Probate is the formal legal process that authenticates the last will, appoints an executor, and involves the distribution of assets to intended beneficiaries. A party who dies with a will, will start the probate process with the appointment of an executor and give such person the authority to handle the decedent’s estate.
Why Avoid Probate?
A party should avoid probate for multiple reasons. First, it is slow. The duration varies, but according to the American Bar Association, an average estate takes six to nine months to fully distribute assets to the rightful heir. Second, it invades privacy. All probate proceedings are in the public records, and anyone can access the decedent’s information regarding the estate. For a grieving family, this can be very burdensome and lead to privacy concerns. Third, it is costly. Probate costs can vary depending on the type of estate, but on average, probate costs are about $1,500. Lastly, it is stressful. It is already enough that the family has lost a loved one, but also having to navigate the probate process can be overwhelming. In all, if a person plans in advance, there are multiple ways to avoid the probate process and transfer the decedent’s assets directly to the beneficiaries.
Ways to Avoid Probate
Assets can be transferred without probate if they are left directly to the beneficiaries by naming them outside the confines of a will. There are also other ways to estate planning. One way would be by creating a living trust. A living trust has a high complexity level because there are different trust types that cater to various needs. By establishing a living trust, the person establishes a separate legal entity to transfer their assets to. The legal entity holds the assets while the person is alive for the set beneficiaries to inherit the assets directly after the person dies; the appointed trustee will manage and distribute these assets. A living trust is beneficial because it has huge potential tax benefits, but most importantly, they keep the assets private upon distribution.
Another way of estate planning is by gifting it away. Gifting away is a low complexity level because it is suitable for lower value assets. This approach provides an immediate benefit to the beneficiaries which can decrease the value of the estate, and ensure fewer assets undergo the probate process upon a party’s death. However, once an asset is gifted, a party loses all control over it.
To conclude, understanding how to avoid the probate process is crucial in estate planning because the process can be lengthy, burdensome, and unreasonably costly. By engaging in various ways to avoid probate, a person can ensure a smoother transition of assets to their loved ones.
Let Us Help You!
If you have any questions, we will help you understand your options. Whether it is accessing funds to cover immediate expenses, closing accounts, or distributing assets in accordance with the will or state laws. Reach out to King Law by calling (888) 748-KING, or complete our contact form for compassionate and valuable assistance in estate planning and administration.