Testators putting together estate plans frequently want to pass as much of their personal property to specific beneficiaries as possible. One of the strategies for maximizing what beneficiaries receive involves keeping as much of someone’s property as possible out of probate court.
Trusts are a common strategy for bypassing probate court, but they are far from the only available solution. People can also plan ahead of time to keep specific assets out of probate court with certain arrangements.
Real estate deeds
Simply drafting a deed is not necessarily the best approach to keeping real property out of probate court. Family members could misplace the deed, or relationships might change between when someone drafts the deed and when they eventually die. However, deeds executed while someone is still alive can protect real property from probate issues. People can add their spouses or caregiving children to the deed for a property. How they hold title could allow the property to bypass probate court. Joint tenants with rights of survivorship automatically assume ownership over another person’s interest in the property after they die.
Transfer-on-death designations
People can choose specific beneficiaries for their financial accounts after their death. Instead of including those accounts in their estate planning documents, they can make arrangements ahead of time with a financial institution for an account to transfer to a chosen beneficiary after their death. The family members and other beneficiaries can take direct control over financial accounts after someone’s passing if there is a transfer-on-death designation attached to the account.
Strategic gifts during retirement
One of the major downfalls of traditional estate planning is that the testator does not get to witness people’s enjoyment of their inheritances. Family members may only gain access to inherited property a year or more after someone dies when those assets pass through probate court. However, testators do have the option of making gifts to their loved ones regularly throughout their golden years. Anyone in a position to leave large resources for their loved ones could potentially give some of that property to family members and other beneficiaries while they are still alive. This strategy diminishes the value of the estate and can allow a testator to witness how people utilize their inheritances.
There are a variety of other tools that can work for those hoping to limit probate challenges after they die. Careful estate planning can go a long way toward streamlining the distribution of property after someone’s passing. Testators who explore every option may be in a better position than most people to create effective and thorough documents.