Probate is a legal process in which the validity of the deceased's will is proven in court. This process involves a probate fee that could take up large portion of your money. This could also take months or years, which means your children or your spouse will have to wait before they could receive any property or money. In all cases, you can actually escape this lengthy and costly process. Take note of the following tips to avoid probate and future problems.
1. Write a Revocable Living Trust
Revocable living trust or simply a living trust is a legal document to hold and manage a person's (the grantor) asset during his/her lifetime. Unlike the last will which can only be effective after the grantor has died, the living trust can be used during the lifetime of the grantor, possible incapacitation, and after death. He/She can do whatever he/she wants with the assets on the trust, or change and revoke the trust, thus, it is called revocable. A trust can help you avoid probate rather than a will. Talk to your lawyer for more information.
When the grantor or the trustmaker becomes incapacitated or no longer have the capacity to manage his/her assets, the living trust should specify what would happen to the assets and the trust when such cases happened.
If the trustmaker dies, the trustee will become the person in charge to manage the deceased's affairs. This would include paying debts, taxes, and bills as well as the distribution of properties to beneficiaries according to the agreement written on the trust.
All assets which are not included in the trust upon the person's death will need to be probated on the court unless there are beneficiaries.
2. Naming Beneficiaries
If you have retirement and bank accounts, you can designate your beneficiaries for these accounts referred to as “payable on death” or “POD” account. Many states also allow designation of beneficiaries for your real estate properties using a “transfer on death deed” or “beneficiary deed”. You will have the ownership of your properties while you are alive then you can pass the ownership to you beneficiaries after you die without going through a probate.
3. Joint Ownership with Rights of Survivorship
Another way to avoid probate is by adding a joint owner to a bank or investment account or to the deed for real estate. To do this, the account should be clearly owned as joint tenants with rights of survivorship. For some states, a married couple can own property through tenancy by the entirety. However, it is important to note that whether you are married or not, as long as the property is jointly owned, the property will automatically go to the other owner when you die, thus, avoiding probate.
For legal assistance in Grand Haven, Muskegon, Ottawa, and Holland in Michigan, contact Van Tubergen, Treutler & Hayes, PLLC at 616-844-3000.
Garber, J. (May, 2017). Advice on Easy Ways to Avoid Probate.