The process of probate can enter the picture after you pass away. There are certain types of property transfers that would be subject to this legal process, but some transfers would not be subject to probate. Let’s look at the facts.
Direct Personal Possession
If you were to use a last will to state your final wishes with regard to the distribution of your personal property, the will would be admitted to probate. The executor or personal representative would handle the business of the estate, and the probate court would provide supervision.
Probate exists to provide certain protections, but there are some drawbacks. The heirs do not receive their inheritances while the estate is being probated, and it will typically take close to a year, even if the situation is relatively simple and straightforward.
There are also expenses that accumulate during probate, and there is a loss of privacy because probate records are available to the general public.
Transfers Outside of Probate
There are asset transfers that would naturally take place outside of the probate process, even if you were not necessarily trying to avoid it. One of these would be the transfer of life insurance proceeds. If you have life insurance policies on your life, the beneficiaries would be paid by the companies directly, and the probate process would not be a factor.
If you own property, you could add a joint tenant to the title or deed. This person would become a co-owner of the property. Joint tenancy comes with something called right of survivorship. This would allow a surviving joint tenant to inherit the entirety of the property in question after the death of one joint tenant. The transfer would not be subject to probate.
Banks and brokerages offer payable on death or transfer on death accounts. With this type of account, you add a beneficiary. The beneficiary would not have access to the funds in the account while you are alive, so you would retain full control. After you pass away, the beneficiary would assume ownership of any remainder that may exist in the account. The probate court would not be involved in the transfer.
A revocable living trust can be a good option for you if you want to be proactive about the implementation of probate avoidance strategy. You can act as the trustee while you are living, and you can also act as the beneficiary, so you maintain control of the assets throughout your life.
After you are gone, the successor trustee that you name in the trust agreement would be empowered to distribute assets among the beneficiaries outside of the probate process.
If you would like to learn more about revocable living trusts, attend one of our upcoming workshops. There is no admission charge and you can click this link to see the schedule: Naples FL Living Trust Workshops.