The most frequently asked question with regard to estate planning is whether or not a will helps avoid probate. The quick answer is no; a will does not avoid probate. However, there is much more that goes on regarding how it will work, how it is used in the probate process, and how to avoid the process of probate altogether.
Probate is a legal method of proving a will and division of assets. It includes several expensive, lengthy procedures that are likely to make information about the deceased public. While a will ensures your wishes are documented, it doesn’t eliminate the need for probate. Fortunately, you may simplify the process and save your families from unnecessary troubles by using efficient estate planning tools, including beneficiary designation, revocable living trust, etc.
Shield your loved ones from probate delays, costs, and lack of privacy with professional guidance from Fales Law Group. Our experienced team focuses on wills, trusts, and probate-avoidance strategies, helping you quickly secure your legacy. Contact us today for a personalized consultation and stress-free estate planning solutions!
In this blog, we’ll address the common question: Does a will avoid probate? We will also discuss what is a will and a probate, how it works, and why people avoid probate.
What Is a Will?
A will is a legal document that outlines what will happen to a person’s assets upon death and how the executor should distribute them. A will can fulfill other objectives. For example, a person can nominate a guardian to care for surviving young children or specify burial arrangements.
A will allows you to
- Name beneficiaries who will inherit the property/assets
- Specific instructions are given regarding the time of the distributions or the funeral arrangements.
- Appoint executors to manage the estate.
- In the case of minors, a guardian can be nominated to take care of the children until they are of age to inherit the estate and assets.
While a will makes the probate process more accessible, it cannot avoid it entirely.
What is a Probate?
Probate is the process of dealing with the affairs of a deceased person’s property and assets. A probate court often reviews a deceased property owner’s assets. This court makes the final decision regarding the allocation of assets to beneficiaries. This involves arranging assets, cash, property, and estates and distributing these among the beneficiaries after other outstanding taxes and liabilities are paid.
Here’s an overview of how probate typically works:
Filing the Will: In cases where the deceased has written a will, the person entitled to execute the will presents it before the probate court. If there is no will, the court appoints an administrator for the estate.
Validating the Will: The legal system looks into the will to ensure it is genuine and legal.
Inventorying Assets: The executor or administrator prepares a schedule of any property and bank accounts as well as other assets that belonged to the deceased.
Paying Debts and Taxes: All creditors’ balances, funeral expenses, and taxes are paid from this estate before the share is distributed.
Distributing Assets: Assets that are paid off after debts are settled go to the heirs as per the decedent’s wishes. If the decedent has not left any wishes on how their property should be divided, the state laws come in handy.
Why Do the People Want To Avoid Probate?
The people want to avoid probate because the process takes quite a lot of time. In most cases, it prolongs the period that a person will take to inherit the estate. The complexity of the assets or the legal issues that arise during the probate process can take months, or even years, to resolve.
Furthermore, the expenditures associated with the probate procedure, such as the executor’s fee, court charges, and lawyer’s fees, will reduce the estate’s worth. Furthermore, the probate procedure is public, which means that information about estates and beneficiaries is no longer private.
Probate also creates family disputes in case the will is vague, or the inheritance is disputed. Even if the heirs have different views on the distribution of the inheritance, there may be some disagreements.
Does A Will Avoid Probate?
The quick answer to the question “Does a will avoid probate?” is no. A will just serves as a guideline for probate.
When a person dies, their executor files the will to the court, and the probate procedure begins. With the will, the probate procedure will divide the assets in accordance with state intestacy rules, which may be consistent with your objectives.
While a will streamlines the probate process by providing explicit instructions, it does not avoid judicial processes. The estate still has to be handled, and the assets will be subject to judicial supervision.
To avoid probate altogether, individuals may consider alternative estate planning tools such as;
Establish a living trust:
Establishing a living trust is one of the most effective ways to avoid probate in a trust. It is because, with it, you can transfer ownership of your assets to the trust during your lifetime. Then, name a trustee to manage the trust after your death. Since the trust will possess the property with a living trust, you will be able to easily avoid probate.
Payable On Death Accounts (POD):
Accounts payable on death are yet another approach that helps avoid the probate process. This means that the beneficiary can get the assets through the financial institution or bank once the policyholder dies, helping you to avoid probate.
How to set up a Payable on Death Accounts (POD)?
- Contact your respective bank or financial institution.
- Request to add POD designation to your account.
- Name your beneficiary.
Assign Transfer-on-Death (TOD) Designations:
Payable-on-death designations (TOD) designations are used for security, real estate, or other assets. Transfer on death ensures the direct transfer of assets to the beneficiaries sans probate.
Key benefits:
- Simple and cost-effective.
- Avoids the need for probate appropriately.
- Allows easy updates to beneficiary designations.
Joint Ownership:
Joint ownership with rights of survival (JTWROS) is a legal arrangement where two or more people have equal ownership of the asset(s), and the surviving owner(s) gain(s) full ownership upon the death of the other owner. If any one of the members in the joint ownership dies, the property will automatically be transferred fully to the other person’s name, hence avoiding probate.
Some common types of joint ownership are:
- Joint tenancy: Both owners have equal ownership, and the surviving owner inherits the deceased’s share automatically.
- Tenancy by entirety: For married couples with additional protections like offering survivorship rights and creditor protections.
- Community property with rights of survivorship: Available in some states, this option ensures a spouse inherits property automatically.
Drawbacks:
- One owner selling their share of the joint ownership can end the right of survivorship.
- Conflicts may arise because joint owners have equal authority over the property. For instance, conflicts may occur if the owners disagree on how to use or maintain the property.
Gift Deed:
You can decrease the extent of your estate by gifting assets during your lifetime. As long as the gifts fall within annual tax-free limits, they won’t be subject to estate taxes or probate.
Small estate affidavits:
In some places, smaller estates can avoid probate through more straightforward procedures. The executor can submit an affidavit instead of going through the lengthy probate process.
Why you need an estate planning attorney:
One of the best precautions anyone can take for their property is to consult an estate planning attorney. Legal procedures governing wills and estates, trusts, and other property transfers differ from state to state, and an attorney may help manage these laws to your advantage. They will guarantee that they develop and put into practice an estate plan that is legal and suitable for your needs.
Additionally, an attorney can help you identify the right tools, such as will, trust documents, or ways that you should use so as to avoid going through the process of probate court. They can also assist in such individualist plans as reducing the amount of estate taxes or some medical issues.
Due to changes in your life, you may find yourself in a different financial and family status. Thus, an estate planning attorney will constantly update the plan.
It is well known that if you attempt to solve a legal problem on your own, you may make a mistake that could slow down the process, increase costs, or even cause conflicts between family members. With your attorney, your estate planning is coherent, legal, and less likely to develop complications in the future.
That way, when consulting an estate planning attorney, you are sure that everything is in its rightful place and your family will be well taken care of as per your will.
Preserve Your Legacy with Smart Estate Planning:
Avoiding probate is a critical consideration in effective estate planning, as it saves time, reduces costs, and maintains privacy for your beneficiaries. However, a will is insufficient to plan for the legal disposition of property since it can never avoid probate.
To simplify the distribution of your assets, you should incorporate your will with some of the following instruments: revocable living trust, POD and TOD accounts, and joint tenancy arrangements. Lifetime gifting can also help to lower one’s probate risk while passing on tax benefits.
In order to make your probate process more manageable, you should seek the services of an estate planning attorney. Don’t leave things to chance, and get proper legal compliance with your plan with Fales Law Group.
Contact us to start planning today to build a future you want and secure for your loved ones, fulfilling all your expressed and implied desires.
