Did you know that the average cost to go through probate is around $15,000 to $20,000? That’s an expensive fee for a situation that can be completely avoided.
As someone who is putting together an estate plan now, one of the things you’ll want to do is to talk to your attorney about how you can reduce the risk of your children or beneficiaries having to go through probate. Probate can be avoided, so here are three tips that may help.
1. Avoid probate by giving gifts
The first option is to simply give away your assets before there is an opportunity for them to go to probate. For example, if you’re going to be moving into a nursing home or assisted-living facility, you may decide to gift your furniture or personal belongings to your loved ones personally at that time. If you want to give financial gifts, you can generally give several thousand dollars to each person annually, but the amount will vary based on the year.
2. Set up joint ownership for your real estate holdings
To avoid probate with real estate, consider adding your beneficiary as a joint owner. Joint ownerships mean that the property will automatically move into the other person’s name upon your death.
3. Set up trusts to skip probate
With trusts, your assets will be taken out of your name and placed into the third-party’s care. You can set up beneficiary designations, so that your beneficiaries will have assets paid out to them upon your death. Additionally, since the assets are not part of your estate when in certain kinds of trusts, they won’t be at risk of going into probate.
Probate is a long, drawn-out process that can be costly, too. It’s best to avoid it if you can. Your attorney will be able to provide you with specific options to help your beneficiaries avoid having to go through probate after you pass away. A small amount of planning now can make a world of difference later on, because without these plans, your loved ones may find themselves tied up in court.