Simple Steps to Avoid Probate
Probate, which is the process of transferring a deceased person’s property to living people, can cost thousands of dollars and take several months, even when no one is contesting the outcome. When families disagree about what should happen to a decedent’s estate, legal costs skyrocket and the timeline can extend into multiple years before the probate litigation is resolved.
Due to the cost and headache associated with probate administration, avoiding probate is a primary goal of many estate plans. The most common probate avoidance tool offered by attorneys is a trust based estate plan. Trust based estate plans avoid probate by transferring assets into a trust during a person’s lifetime, and naming a successor trustee who will automatically control those assets when the creator of the trust passes away. Well drafted trusts are effective, but trust based estate plans have disadvantages due to their complexity. Because trust documents are difficult for clients to understand, many are confused or intimidated by the trust planning process and fail to fully fund their trusts, leaving assets out of the trust that must go through probate. Secondly, trusts are expensive, which creates a barrier for many families.
Fortunately, our friends at the Florida Probate Law Group have provided simpler methods to avoid probate, which do not require expensive legal services to accomplish. Most financial accounts will allow you to name a “pay on death” or “transfer on death” beneficiary. By naming such a beneficiary, a person can ensure that their account will be automatically transferred to their chosen family member or friend upon their death. When a pay on death designation is in place, the account beneficiary may simply appear and the bank with identification and a death certificate to receive the funds earmarked for them.
Real estate can likewise be made to automatically transfer on death through the use of an enhanced life estate deed or “Lady Bird Deed.” By executing a Lady Bird Deed, the owner of a piece of property creates a “remainderman” who will gain title to the property immediately upon the death of the owner. However, the owner retains the right to sell and use the property during their lifetime without interference from the remainderman. A Lady Bird Deed can be created without the help of an attorney, however it is best to consult with an attorney when creating a Lady Bird Deed. The deed is a simple document which is generally reasonably priced to get through an attorney. Furthermore, if you are married or have minor children, your state laws may limit who you can transfer your home to using a Lady Bird Deed. Therefore consulting with an attorney will ensure that your deed is effective and follows the rules of your state.
Finally, cars can often be transferred without probate at your local DMV. To ensure that your vehicle will not need to pass through probate, you can add a family member to the title with the word “or” between your names.
These simple steps will allow most people to avoid probate without the need for expensive and complex legal services.