Many people believe their estate will have to go through probate when they die. But that’s not necessarily true.
You have several options if you want to keep your assets out of probate altogether.
What is probate?
Probate is the court-supervised process of validating a person’s last will and testament, paying their debts, and transferring assets to their beneficiaries. During probate, the deceased’s executor must prepare an inventory of all assets, identify any liabilities and creditors that need to be paid, file documents with the court, pay all outstanding taxes or fees related to the deceased’s estate and finally distribute the remaining assets according to their wishes.
Probate can take anywhere from six months to two years or more. The length of the process will vary depending on various factors, such as the size and complexity of the estate or whether any disputes arise among family members or creditors.
There are some things you can do to keep your estate out of probate. One way is to create a trust, which allows you to transfer ownership of your assets into the trust while you are still alive. When you pass away, the trustee will distribute your assets according to your wishes without going through the probate process.
Another option is to name beneficiaries on your accounts and other financial instruments, such as life insurance policies and retirement accounts. This ensures these assets will pass directly to the designated beneficiary without going through probate court upon your death.
You can also use joint ownership on certain types of property, such as bank accounts or real estate. With joint ownership, two or more people own an asset together, and when one dies, the other automatically becomes the sole owner without going through probate court.
If you want to keep your estate out of probate after you die, it’s important to discuss your situation with someone who can guide you through the process and ensure the legality of your plan.