Resolving a deceased person’s legal and financial affairs can be a trying and rather challenging endeavor for the relatives and loved ones he or she leaves behind. Accomplishing this task often requires the assistance of an experienced estate attorney such as the Scottsdale Estate Planning Attorney locals have trusted for years! Our firm has some of the best estate lawyers who possess a wealth of knowledge about estate distribution and might be able to help you navigate through this process. The following is a brief article about probate and five steps that can be taken to avoid it.
What Is Probate?
Essentially, probate is a good thing. This legal procedure is a court-sanctioned examination of a late individual’s last will and testament. Typically, probate proceeds fairly smoothly. A decedent’s will is deemed legitimate by a court and his or her property, finances, and legal affairs are distributed and carried out as directed. However, in certain larger and more complicated estates, or in cases where the will comes under legal challenge by an outside party, the probate process can be quite lengthy and expensive. Fortunately, you can employ safeguards to avoid probate.
- Draft a Living Trust
By creating a living trust, a decedent transfers ownership of his or her assets to a Trustee. Upon the individual’s passing, the Trustee has the legal authority to dole out the deceased’s assets as directed by the language of the trust. Once the trust is established, it is no longer considered the late person’s property and, therefore, not part of an estate. It is important to note, however, that while assets contained within the trust might not have to enter probate, they may be subject to federal estate taxes.
- Establish Joint Tenancy with the Right of Survivorship
This action is especially critical to keeping real estate out of probate. Under these circumstances, the individual drafting a will or formulating an estate plan makes the decision to jointly hold ownership of his or her property with someone else. Typically, joint ownership is held with his or her spouse, but this is neither always the case, nor mandatory. Upon the individual’s passing, ownership of the real estate automatically passes to the person with whom they established joint tenancy.
- Gift Assets Prior to Death
Some individuals may choose to distribute their assets prior to their death. When someone is the legal and rightful owner of a specific asset, they have the authority to do with it as they please. Those considering gifting as a means of avoiding probate should, however, realize that gifts exceeding a specific monetary value might be subject to gift taxes.
- Designate Beneficiaries
Certain financial assets, such as retirements accounts and insurance policies, require the owner/holder to designate a beneficiary. The beneficiary can be anyone, but will most often be the account owner’s spouse, child, or grandchild. To claim the funds, the designated beneficiary would likely only need to provide the account owner’s death certificate and proper identification.
- Establish Transfer on Death Registrations
Not every bank or financial institution mandates beneficiary designation on accounts owned by their clients. However, the account owner can request their accounts be given the Transfer On Death Registration. In such an instance, the account owner fills out a card listing who he or she wishes the available funds be awarded to upon his or her passing. Much like beneficiary designations, the individual named in the payable on death registration would simply need to provide proof of the account owner’s passing and proper identification to claim those funds.
A special thanks to our authors at Arizona Estate Planning for their expertise in Probate and Estate Law.