I was recently involved in a car accident. Unfortunately, since it was my first accident, I was scatter-brained and anxious. What I did not realize at the time was that the actions you take immediately after the accident can affect a personal injury case and the outcome of that case. I wanted to find a way to share my experiences and mistakes with other. Since the Internet is so popular, I figured this would be a great way to do so. While you likely aren't planning on being in an accident soon, if you are, hopefully you remember some of the tips I share on this website.
As part of your estate planning, you have to decide whether or not you want to take steps to avoid probate. There are several advantages of doing so and more than a few ways you and your probate attorney can do this. Before making this important decision, here is what you need to know.
Why Avoid Probate?
One of the biggest reasons for avoiding probate is how long it takes. In some cases, it can take months, or even a year or longer, for the process to be complete. In the meanwhile, your beneficiaries will be left waiting to take possession of the property left to them.
There are also fees attached to probate. In addition to the attorney and executor fees, your estate could also be responsible for court costs and appraiser's fees. Depending on your county and state, there could be additional fees.
How Can You Avoid Probate?
Even though it might sound complicated, avoiding probate can be fairly simple. For instance, you could set up a revocable living trust.
You could transfer ownership of the property you want to give to beneficiaries to the trust. After your death, your attorney or the trustee would then transfer it to beneficiaries. A trust is not subject to the probate process, so your beneficiaries could quickly take ownership of the properties.
You could also establish joint ownership of the property you want to leave. For instance, the beneficiary could be given part ownership of the property while you are still alive with the condition that upon your death, he or she would take complete ownership of the property.
You also have the option of just giving away the property before you die. If you are not the owner of the property at the time that you die, probate is not necessary.
What Are the Limits of Probate Avoidance?
There are some limitations to what probate avoidance can do for you. It cannot help you avoid taxes. Even if you gift property to friends and relatives, the state and federal government could still present a tax bill.
Probate avoidance also does not help terminate your legal obligation to your family. For instance, if you want to transfer property through a trust in an attempt to keep it out of the hands of your spouse, it might not work. This is especially true in a community property state.
Some states have laws that honor the rights of spouses and minor children to inherit property. Your attorney would have to work with you to find a different method of taking care of personal issues with family inheriting property.
There are many more angles of the probate process that need to be covered. A legal office like Flaccus Law can help you explore those and how they pertain to you.