Avoiding
Probate
Many people want
to avoid probate for the following reasons --
-
It is
expensive.
-
It takes
time.
-
It is public.
An estimate of the value of your assets is filed and an
inventory of property may be filed
-
It provides a
forum for creditors to get paid.
-
It allows a
spouse to claim a statutory share of the
estate.
On the other hand
--
-
It is often
just as or more expensive to arrange your affairs to
avoid probate and it often does not work. Also many of
the expensive things which must be done after death must
be done whether or not there is probate.
-
Probate
allows creditor claims to be barred. If proper notice is
given claims are barred unless they are filed within a
certain time. Creditors can also attack arrangements
meant to avoid probate if they were also meant to avoid
creditors.
Whether or not it
is desirable to avoid probate is something which must be
determined in each individual case. Many people believe that
avoidance of probate avoids estate taxes. That is not so and
should not be a consideration.
How can you avoid
probate? By not having any assets which require a will or
the law to say who gets them when you die. If they pass to
someone named in some document other than a will or the
statutes you avoid probate. Among devices which will do this
are --
-
Trusts
-
Joint
Tenancies
-
Beneficiary
designations
-
Pay on death
accounts.
In smaller
estates use of the last three items is often very effective.
But if any substantial amount of assets exist in your sole
name without any beneficiary designation there will still be
probate. If you are going to avoid probate you must make
these arrangements for all your property. You must also
arrange to have all property you acquire in the future
subject to such arrangements. The same can be said of living
trusts which are a very popular way of avoiding probate.
There will still be probate if only some of your assets are
transferred to the trust. All your property must be
transferred to the trust to avoid probate. Just signing the
trust document is not enough.
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