Most people have heard the term "avoiding probate", but until you begin to deal with issues concerning an estate you may remain confused about exactly what it means. Probate is an age-old legal method of dealing with the debts and assets of those who have passed on, and whether you have a will or not, many loved ones will be left to deal with probate issues after a death. There are several surprisingly simple ways to deal with estate property that does not involve probate, however. Read on to learn about these work arounds to ensure that estates can be distributed more quickly and efficiently.
Revocable trusts: This handy legal instrument can be thought of as a will, but is actually far superior to a will. They do have some similarities, but the differences are what makes this form of estate planning so attractive.
- Similarities: Just a will appoints an executor (also known as a personal representative) a trust will name a trusted and responsible person to play a similar role, the trustee. The trustee's duties begin only after the death of the trust's owner, and they are charged with the distribution of the property to beneficiaries and paying the bills of the estate. A will names beneficiaries to inherit property, and a trust can have similar provisions.
- Differences: Wills must be filed with the probate court, a process that can take several months and is subject to public record. In most instances, none of the beneficiaries can take possession of any property prior to the probate becoming final. A trust, however, allows those beneficiaries to immediately take possession of the asset. Additionally, a trust is private; no one (expect the owner and the trustee) know what is in the trust or who is getting what.
Transfer on Death: Major assets such as saving and checking accounts and investments accounts can be held hostage for months while probate progresses, but a simple document added to those same accounts can ensure immediate access. Also called payable on death, transfer on death designations name specific people to take immediate possession of that asset. A copy of the death certificate is all that is needed to gain access to any designated account.
Deeds: For many estates, real estate makes up the most valuable chunk of assets. For those who are not married, making a new deed for real estate can help ensure that your family home and other real property passes automatically to a named person or persons. A variety of types of deeds are available for estate planning purposes. The process to change a deed is referred to as performing a "quit claim".
To learn more about using alternative estate planning practices, contact an estate attorney such as Seiler & Parker PC.Share