Even those who don’t fully understand the probate process are pretty clear about the fact that they want to avoid it. As a Central Minnesota probate lawyer, I see so many cases where probate could have been shortened or avoided altogether if only people had more information.
Probate is a legal process that takes place when an individual dies. If he or she has a will, probate is a time when the courts check to ensure it is valid so that property can be distributed according to that person’s wishes. During this time, all of the individual’s assets need to be accounted for, and any debts and taxes must be paid before money or property is given to beneficiaries.
Unfortunately, probate can take a very long time. At best, Central Minnesota probate is likely to take a few months, although more complex estates can take years. During this process, beneficiaries are unable to access their inheritance, no property can be sold, and lawyers’ fees tend to mount up.
There is some property, however, that is not subject to probate. For example, there are types of accounts, like life insurance, that pay upon the individual’s death. Many people don’t realize that some savings and checking accounts can be designated as payable-on-death. A probate lawyer can help with the details, or you can try talking to your bank to see what you can do about naming beneficiaries and keeping that money out of probate.
Other types of accounts, such as stocks, bonds, and mutual funds, can be set up to transfer upon your death. There are specific forms that need to be filled out for each type of account or property, but the process is not terribly complicated. As with the case of a payable-on-death bank account, beneficiaries do not have any rights to the money or property in a transfer-on-death situation until the current owner is deceased.
Naming beneficiaries is, in and of itself, a tool for avoiding probate for certain types of accounts. Retirement plans, for example, can skip the probate process when beneficiaries are clearly named. Upon your death, benefits automatically transfer to those beneficiaries.
Property that is owned jointly may also avoid the probate process. That means that if a home is owned in both spouses’ names, it can automatically pass to the surviving spouse. By setting up joint tenancies for other property, you can help to avoid having them go into probate. This strategy can get complicated, however, in blended family situations or when leaving property to one of your kids. Talk to your lawyer before choosing this option, as there may be safer ways to achieve your goals.
A final helpful tool for avoiding the probate process is the living trust. In simple terms, you declare a trust that holds your properties. While living, you (and possibly your spouse or other designated people) act as the trustee and are able to control all of the property within it. The trustee will also be in charge of distributing funds when you pass away, which helps avoid the need for probate, as the property is accounted for and beneficiaries are already named.
Probate can be a hassle, so knowing what you can do to avoid it is to your benefit. Likewise, it works in favor of your beneficiaries, as less of your estate will go to pay for probate lawyers and other legal fees. If you’d like to learn more about setting up your estate in such a way that it avoids Central Minnesota probate, call our office at (763) 244-2949 to schedule a consultation.