It can be helpful to reduce the size of a probate estate.
The probate courts exist to oversee the passing of property between people and their heirs.
Like many legal systems, it can be slow.
When time is money, the costs can certainly add up.
According to a recent Indianapolis Business Journal article titled “Try these steps to minimize your probate estate,” these realities underscore the value of estate planning to reduce the size of a probate estate.
How does one accomplish this?
First one must work with an experienced estate planning attorney to create a last will and testament.
Without a last will and testament, you will die intestate.
What happens if you do die intestate?
The laws of your state govern who inherits assets subject to probate..
This can be especially complicated if you are an unmarried cohabitant, part of a blended family, or have strained family relationships.
If you die leaving behind orphaned minor children, then the court may also be responsible for selecting a guardian.
As a result of these dynamics, probate can be quiet expensive and stressful to those left behind.
It is far easier to simply create a valid last will and testament to designate who inherits what and who will rear your children.
Although a last will and testament does not remove assets from your probate estate, it can make the process smoother.
You should also designate an executor as part of your last will and testament.
This individual will be responsible for paying debts and taxes and transferring the assets to heirs.
Certain assets or types of planning allow for specific property to bypass probate.
As a result, they can pass directly to heirs and remain private rather than be included in public record.
How are assets removed from the probated estate?
When a person moves assets to a trust, the assets are then owned by the trust entity.
To accomplish this, the title of ownership and beneficiary designations for your assets must be changed to your trust.
While trusts do have benefits, they may not be the best option for everybody.
Certain accounts allow for you to name a beneficiary.
These conclude insurance policies, investment accounts, and retirement accounts.
Keeping the designations updated is essential to ensuring intended beneficiary inherits.
Payable on Death (POD) or Transferable on Death (TOD) accounts.
Transfer on death and payable on death accounts allow assets to avoid probate upon death, without the risks associated with adding others as joint tenants with rights of survivorship on your assets.
Doing so will subject your assets to the potential divorces, lawsuits, and bankruptcies of the other joint owners.
In Kansas and Missouri, you can even arrange for your real estate to bypass probate via a transfer on death deed (Kansas) or a beneficiary deed (Missouri).
The best way to create a comprehensive estate plan to reduce your probate assets is to work with an experienced estate planning attorney.
Reference: Indianapolis Business Journal (Aug. 26,2022) “Try these steps to minimize your probate estate”