Probate court helps settle disputes about people’s property or manage complicated estates. Unfortunately, probate can also mean that creditors are able to make claims against your property and that your family members will have to wait months before they receive the inheritance you leave for them.
Trying to avoid probate as much as possible is a common goal for those planning their own legacies. There are three different ways that you can reduce the likelihood of the assets in your estate going through probate court.
1. Move the property into a trust
Trusts aren’t just useful for helping people qualify for state benefits, avoiding creditor claims and reducing the tax liability of an estate. They can also help a testator sidestep probate requirements. Property held in a trust isn’t owned by the person who died and therefore is not subject to probate oversight.
2. Make gifts to your family members
Every year, the IRS adjusts how much people can give to their family members without tax liability. Knowing those rules and making annual gifts to your family can be a great way to diminish how much property is in your estate so that your assets won’t pass through probate after you die. It also means you get to watch your family enjoy that inheritance while you are still alive.
3. Arrange for property to transfer directly when you die
There are deeds for real estate and account designations for financial holdings that can ensure whatever property you have goes directly to your spouse, your child or another beneficiary. Transfer on death designations can effectively eliminate the requirement for certain assets to move through probate court
Thinking about your property and what you want to accomplish with your estate plan can help you put the right plan in place for when you die.