Probate: “the court-supervised process of distributing a deceased person’s money and property.” As a deceased person’s estate (all of their money and property) goes through probate, the estate is subject to a variety of costs. These stem from attorneys, executors, appraisers, accountants, courts, and state law. Depending on the complexity of the case, fees run into tens of thousands of dollars. Fortunately, you can take steps to avoid probate costs altogether.
Three simple ways to reduce or avoid probate costs:
Name a Beneficiary
The probate process applies to those accounts or other property in your name at your death. By naming a beneficiary, you assign these accounts and other property to the named individual without involving the courts. Depending on your states, common beneficiary designation assets include:
- Life insurance
- Annuities
- Retirement plans
- Real estate
Caution: You will name someone as a beneficiary of an account or piece of property through the use of a beneficiary designation. Thus, they will then receive that account or property outright. This could be subject the account or property to claims asserted by the beneficiary’s creditors.
Create and Fund a Revocable Living Trust (RLT)
Once you create an RLT. Then, you will properly transfer the ownership of your accounts and property to the RLT by re-titling them into the name of the trust, you remain in charge of all legal decisions until your death as the trustee, and you retain the enjoyment of those accounts and property as the current beneficiary. After your death, your named successor trustee will manage and distribute your assets – according to your wishes. Therefore, trusts work well only when properly created and funded by experienced estate planning attorneys.
Own Property Jointly
Avoid probate if you own the property jointly with a right of survivorship. Similarly to a beneficiary designation, joint ownership has the effect of automatically transferring the ownership upon your death. Also, there are several ways that you can establish joint ownership of property, such as:
- Joint tenancy with right of survivorship – ownership simply transfers to other tenants upon your death;
- Tenancy by its entirety – a form of joint tenancy with a right of survivorship, but only for married couples in some states;
- Community property – property obtained during a marriage in some states;
State laws play an important role here. We can help you determine which form of joint ownership, if any, is a good fit for you.
Caution: Just as with a beneficiary designation, adding a joint owner to your accounts or property can subject the accounts or property to claims asserted by the new joint owner’s creditors. Moreover, this vulnerability begins the moment they are added. This means that your accounts or property could be seized by your new joint owner’s creditors even while you are still alive.
We Can Help
Contact our office today to schedule your appointment. As an added convenience for our clients, we are available to hold our meetings through video conferencing or by phone if you prefer. We are here to help you decide whether it makes sense to avoid probate in your particular case and, if so, the best way to do so.
About Skvarna Law Firm in Glendora and Upland, California
Skvarna Law Firm operates offices in Glendora and Upland, California. We provide legal services. We cover San Bernardino, Los Angeles, Orange and Riverside Counties. This includes several cities. Upland, Ontario, Rancho Cucamonga, Fontana, Colton, Rialto, Chino, Chino Hills, Glendora, Claremont, Pomona, La Verne, Montclair, San Dimas, Azusa, Covina, West Covina, Diamond Bar, Walnut, La Puente, Corona, Norco & Mira Loma. Visit SkvarnaLaw.com to learn more.
