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Estate Planning Lawyer

Probate is the legal process where a court is involved in the settling of an estate. It can be unnecessarily time consuming and expensive. Costs vary according to the location and the value of the estate and can take from 6 months to 2 years. Luckily, there are ways to plan your estate so that not only are your assets protected, but they may be able to pass to your beneficiaries without going through the painful probate process.

Add a Joint Owner

One of the easiest ways to avoid probate is to add another owner. The ownership must be, specifically, joint tenants with right of survivorship. What this means is that both owners (you and your joint tenant) each own 1/2 of the asset and either will take full ownership upon the death of the other. Neither tenant can sell or transfer ownership without the other. The right of survivorship will allow the asset to pass ownership to the joint tenant without going through probate. However, the new owner must take steps to protect the asset to avoid probate upon their death.

Name a Beneficiary

To avoid probate on some assets, you can name a beneficiary. The types of assets commonly protected in this manner are:

  • Retirement accounts and pension plans
  • Bank accounts with a payable on death (POD) designation
  • Investment accounts (other than retirement) with a transfer on death (TOD) designation
  • Real estate with a transfer on death deed or affidavit

Since state laws vary, you’ll want to make sure that all the beneficiary designations are available in your state for your particular assets.

Establish a Trust

To avoid probate on assets not covered above, you must transfer ownership before your death. To safeguard your solely-owned property, you would first establish a trust account. The next step is to fund the trust: transfer ownership from your name to the name of the trust account. Any remaining assets not included in the trust and not covered by joint tenancy with right of survivorship or beneficiary designations may be subject to the probate process.

There are two main types of trusts:

  1. Revocable trust
  2. Irrevocable trust

In a revocable trust, the assets are owned by the trust and the beneficiary is named. At any time, the grantor of the trust can make changes or cancel the trust entirely. In an irrevocable trust, once funded, there are no changes allowed. The main reason you may want to choose an irrevocable trust is that it can help avoid capital gains taxes where a revocable trust does not.

The laws concerning estate settlement can be very complicated. Contact an experienced probate lawyer in Folsom, CA to make sure your estate is planned according to your wishes.

Thanks to Yee Law Group for their insight into estate planning and avoiding probate to protect your assets.

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