Many estate planning clients want to know how to make certain assets “non-probate” – i.e. not subject to a probate proceeding. There can be a variety of reasons why this is a good idea for you. In fact, “How do I avoid probate?” is probably the most common question asked at my estate planning consultations. Many well-informed clients have done their research and determined that the probate court is not where they want their family to be after they are gone. Avoiding probate court with designated beneficiaries is a common tactic for your retirement accounts. But what about your house and other real estate?
What is Probate?
Probate is a legal term for what most people know as “estate administration” – the process a court uses to distribute a dead person’s assets. The laws in each state differ on how assets should be distributed. I am not here to tell you about the probate laws of all 50 states (there are books that can do that).
When a person dies, there are two main questions that need to be answered,
- Did the person have a valid will?
- Is Probate necessary?
If a person dies with a valid will, that will governs how their assets are distributed. They are considered to have died testate (another intimidating legal term you may have heard). If a person dies without a will? Then they are considered intestate and you need to look to the state’s laws to figure out how the assets will be distributed.
Options to Avoid Probate
There are a variety of ways to make real estate a non-probate asset. Some of the most common ways:
- Transfer the property into a trust;
- Execute a Transfer on Death Deed for the property;
- Own the property jointly with someone else having a right of survivorship;
- Transfer the property to someone else during your lifetime; and
- Create an LLC or other entity to own the property.
The basic concept is that the property does not need to be transferred by a personal representative upon your death. These options are a good start for things to consider when putting together your estate plan.
If you don’t have a will yet, or if you have one that you may need to update to avoid probate, call my office to set up a meeting and we can review the best options for you – (877) AMAYERS.