Probate is the legal process of obtaining the court’s approval to distribute the deceased’s assets according to their last will or state law if they passed on intestate. The probate process begins with the appointment of the estate’s personal representative, identification of the decedent’s assets, settlement of estate taxes and any debts the decedent had before distributing what is left to the right parties as provided by Minnesota law.
The probate process can be quite costly. And the longer the process takes, the more costly it can be. Fortunately, there are a few steps you can take to cut down the cost of the probate process. Here are some of them:
1. Putting assets on joint-ownership
The right to survivorship for jointly-owned assets is automatically passed on to the co-owner once one party is deceased. This way, jointly-owned assets avoid the probate process. Just be sure to weigh the merits and demerits of co-owning assets.
2. Setting up a trust
Any asset held in a trust is controlled by the terms of the trust instrument. Meaning assets that are held in a trust are not required to go through the probate process. In fact, one of the reasons people set up trusts is to avoid probate.
3. Having clear beneficiaries for movable assets
Just because you have a will in place does not mean every asset in your name must go through probate. Some assets, such as investment and retirement plans, bank accounts, stocks and bonds, IRA accounts, pension plans and 401k(s), allow you to name a beneficiary. Naming clear beneficiaries for such assets will help you avoid probate.
When you pass on, you want all your assets to go to your loved ones. However, the probate process can greatly eat into your estate. These are some of the steps you can take to avoid some of the costs associated with the probate process.