Probate is the legal process of transferring ownership of property from a deceased person to their heirs. It can be a lengthy and expensive process, so many people try to avoid it if possible. The question is, how can you avoid probate?
Create a trust
Usually, when people think of trusts, they think of wealthy families who use them to avoid paying taxes. But trusts can be used by anyone, and they don’t have to be complicated or expensive. A trust is simply a legal arrangement in which one person (the trustee) holds property for the benefit of another person (the beneficiary).
Make a beneficiary designation
If you have any accounts that allow for beneficiary designation (such as life insurance policies, retirement accounts, or bank accounts), be sure to name a beneficiary. That way, the account will pass directly to the beneficiary upon your death without going through probate.
Give gifts during your lifetime
You can give away property during your lifetime without going through probate. For example, you could give a family member a piece of jewelry or real estate that you own. Just be sure to do it in writing so there’s no question about your intent.
Set up a pay-on-death account
With a pay-on-death account, you name a beneficiary who will receive the money in the account when you die. The account remains in your name during your lifetime, and you can change the beneficiary at any time.
The main benefit of avoiding probate is that it can save your loved ones time and money. Probate can be a lengthy and expensive process, so avoiding it can spare your family the hassle. Additionally, avoiding probate can help keep your personal affairs private, as the probate process is public record. Finally, by taking steps to avoid probate, you can be sure that your property will go to the people you want it to without having to go through the court system.