Probate, the legal process of administering a deceased person’s estate, may be time-consuming and costly. Many seek ways to avoid probate to simplify matters for their loved ones. Below are two potential methods to bypass probate and why this might benefit you and your family.
Two potential ways to avoid probate
Consider the following strategies to avoid probate:
Create a living trust
One popular method of avoiding probate is establishing a living trust. This arrangement allows you to transfer your assets into a trust during your lifetime. You maintain control of these assets as the trustee. Upon your passing, a successor trustee will distribute the assets to your beneficiaries without going through probate.
While this process may require upfront effort and expense, it could save your beneficiaries time and money.
Use beneficiary designations
Another way you might bypass probate is by utilizing beneficiary designations on certain assets. Financial accounts such as life insurance policies, retirement accounts and some bank accounts allow you to name beneficiaries directly. When you pass away, these assets could transfer directly to the named beneficiaries without going through probate.
It is essential to keep your beneficiary designations updated and ensure they align with your overall estate plan. Regularly reviewing and updating these designations could help ensure the distribution of your assets according to your wishes.
Benefits of avoiding probate
Bypassing probate could offer the following potential benefits:
- Time savings: Probate could be lengthy. It could sometimes take months or even years to complete. Avoiding probate may allow your beneficiaries to receive their inheritances more quickly.
- Cost reduction: Probate often involves court, attorney, and executor fees. These could significantly reduce the value of your estate. Bypassing probate might help preserve more of your assets for your beneficiaries.
- Simplified administration: Avoiding probate may reduce the administrative burden on your loved ones during a difficult period.
Consider consulting an attorney to determine the best approach for your specific situation. They could provide personalized guidance based on your unique circumstances and goals.