Is There Any Way to Avoid Probate?
August 18th, 2017
When a person who owns property that is titled solely in his or her name passes away, the probate process is a must, whether the person dies with or without a will. A probate court will then administer the distribution of the estate in accordance with the will or the laws of intestate succession, which means that the person has no will. A personal representative, which is a person designated in your will or appointed by the court, will handle the affairs related to your estate until all of your property has been distributed. The downside to probate proceedings is that it is often expensive, time-consuming, and may require the payment of additional taxes. However, there are several estate planning techniques that you can use in order to avoid your estate being placed into probate.
First, you can give property to your loved ones while you are still alive. This is called an inter vivos gift, and it can prevent that property from going through probate. Alternatively, you can title property jointly in your name and the name of the other person whom you want to receive the property following your death. For example, if you title a piece of real estate jointly in your name and your daughter’s name, then the real estate will automatically belong to your daughter following your death, without any need to go through probate. You can do the same with a bank account. However, there may be adverse tax consequences or exposure to creditors if you take this route, as well as difficulties in managing the property prior to death.
Another option for bank accounts and securities is to make them payable on death (POD) or transfer on death accounts. This designation allows the account or asset to pass directly to the person you choose without going through the probate process.
A living trust is a means of avoiding probate that has become increasingly popular in recent years. An individual, who is the grantor, creates a living trust during his or her lifetime, for his or her own benefit. The trust is typically revocable, which means that the grantor can revoke or modify the trust until he or she dies or becomes incapacitated. Throughout the grantor’s life, he or she receives income from the trust, which contains all of his or her property. This sets up a situation in which the grantor no longer solely owns any property, which is the key to avoiding probate.
The estate and probate attorneys of Legacy Law Center pride themselves on successfully guiding clients through the estate planning process, as well through probate proceedings, if necessary. We have the knowledge and resources to help you make the decisions that are best for you and your family. Don’t hesitate to call our Ann Arbor office today and learn how we can assist you.