What is Probate?
Probate is the process through which the estate of a decedent that has passed away with or without a will is administered. Common issues that are addressed in the probate process include transferring assets to beneficiaries, paying the debts of the estate, establishing the validity of a will,1 and paying any taxes that may be due.
What are the problems associated with probate?
The probate process can cost an estate a significant amount of money due to legal and administrative costs. In addition, when an estate goes through probate, it can delay the transfer of assets for months or even years. Finally, the probate process is a matter of public record, so going through the probate process opens up an estate’s affairs to financial scrutiny. For this reason, many people try and avoid the probate process through various mechanisms, some of which are discussed below.
Can I Avoid Probate?
Fortunately for people who are concerned about these issues involved with probate, there are certain ways that you can avoid having your property go through the process. Two of the most commonly utilized probate avoidance techniques are detailed below:
- Placing assets in a living trust – When assets are placed in a trust, they can be transferred directly to the trust beneficiaries2 without going through probate.
- Joint ownership – When property is jointly owned, full title to the property often passes directly to the other owner when the other owner passes away, avoiding the need for probate.