No one wants to think about their own death, but planning for it is crucial. If you don’t plan, your estate may have to go through probate. This process is often expensive and time-consuming, so it’s best to do everything to avoid it.
Here are some tips on how to avoid probate.
What is probate, and how can you avoid it?
Probate is the legal process of administering the estate of a deceased person. The process typically involves:
- Inventorying the dead person’s assets
- Paying debts and taxes
- Distributing the remaining property to beneficiaries
One way to avoid probate is to create a revocable living trust. This type of trust becomes effective during your lifetime, and you can name yourself as the trustee. As the trustee, you have the authority to manage the trust property and make changes to the trust agreement. You can also name a successor trustee to take over after your death. The successor trustee can then distribute the trust’s assets according to your wishes.
Another way to avoid probate is to use beneficiary designations. Many assets, such as life insurance policies and retirement accounts, allow you to name a beneficiary who will receive the asset upon your death. These assets will not be subject to probate.
Finally, you can also gift assets during your lifetime. For example, you could give each of your children a certain amount of money every year. If you do this for several years, you can reduce the size of your estate and avoid probate altogether.
By planning ahead and taking some simple steps, you can keep your estate from going into probate and make the grieving process easier for your loved ones.