Probate can be a time-consuming and expensive legal process. It draws on the resources of the estate, which means fewer assets are distributed to family and other heirs. It can also tie up estate resources, keeping heirs from benefiting from assets while probate hearings and other legal matters are handled.
Avoiding probate can speed up the process of asset distribution and reduce stress on loved ones. Discover more about probate below, including when and how an estate planning attorney can help you avoid the process.
What Is Probate?
Probate refers to the process of going through the courts to transfer property to heirs upon the death of an individual. The process includes a series of steps:
- Filing a petition or application formally with the court
- Appointing a personal representative (named by estate documents, or if none, using the default laws) by the court, which may or may not require a hearing
- Tasks completed by the personal representative, including gathering information about all the assets of the estate, including inventory and value appraisals, and settling estate debts and obligations
- Distribution of remaining assets to heirs in keeping with any will or current state estate law
- Final approval and closing of the estate, including reports filed by the personal representative and approval of the heirs—this step may also require hearings in some cases
Probate is a public legal process, which means information about the heirs and estate can be accessed by anyone through public records. Heirs and potential heirs may also dispute various proceedings, including disputes about the validity of a will or how the personal representative is handling estate management and asset distribution.
Can You Avoid Probate?
Yes, you can avoid probate. According to the Minnesota Judicial Branch, probate isn’t usually necessary in cases where someone didn’t own any real estate solely in their name and had no other property solely in their name that exceeded $75,000 in value.
That doesn’t mean you can only avoid probate if you have limited personal assets. You can plan ahead to avoid probate with smart allocation of resources. Some ways to potentially keep assets out of probate include:
- Setting up trusts. When you set up and fund a trust, the assets you put in it are owned by the trust and not you. That means they don’t have to go through probate when you pass away. You can create a trust that lets you continue to benefit from the assets even though you don’t officially own them and then pass the assets easily on to a successor beneficiary without probate processes.
- Naming beneficiaries for payable-on-death assets. Many of your accounts may have payable-on-death options. If this is the case, you can name a beneficiary for those assets; when you pass away, the account automatically pays to the beneficiary in question without having to go through probate. This is a common option for checking and savings accounts, many types of investment accounts, and retirement accounts.
- Own property jointly with your spouse. Ensuring your spouse is a co-owner of property including checking and savings accounts, real estate, and vehicles is a good way to keep those items out of probate. In most cases, the property passes to the joint owner automatically. You may also be able to use this tactic to co-own property with a significant other you aren’t married to and still keep the property out of probate.
The Benefits of Avoiding Probate
The most common reasons people want to avoid probate are time and money. Probate is a legal proceeding that can involve court filings, hearings, and attorneys—all expenses that can really add up. Those expenses are usually paid by the estate, reducing how much is left to split among heirs. In cases where probate is complex and drags on for months or years, the heirs can end up losing a lot of value in the estate.
Time is, in some cases, a more important factor. Loved ones may need assets from the estate to cover living expenses during transition periods after someone passes away. If all the assets are tied up for months in probate, that can leave a surviving spouse and dependent children in a rough situation.
Some people want to avoid probate because it’s public. Putting assets in trusts keeps them private, which means people don’t know what assets were passed on to heirs. This can help protect heirs from scams, fraud, and financial abuse—especially when those heirs are minors or are otherwise at risk.
Why Working With an Estate Planning Attorney Can Help
To ensure your estate can avoid probate, you must plan ahead. Working with an experienced estate planning attorney can help. They can:
- Review your assets, financial situation, and goals with you so they can provide individualized advice about how to best protect your assets and plan to avoid probate
- Help you set up trusts to shelter your assets for your own benefits now and for the benefits of your heirs in the future
- Understand what payable-on-death accounts you have so you can complete beneficiary forms
- Learn more about other options for transferring wealth to loved ones without the assets having to pass through probate
For more information about how an estate planning attorney can help you protect your assets and create a seamless transfer of ownership in the future, reach out to Stone Arch Law Office today.