Probate can be a lengthy and complex legal process that your loved ones may have to navigate after you pass away.
However, you can streamline this process and minimize the burden on your heirs.
Establish a living trust
Did you know that only 33% of people in the U.S. have any kind of estate plan, reducing the impact of probate on their loved ones? Creating a living trust can allow your estate to bypass probate. This legal arrangement allows you to transfer your assets into the trust while you are alive. Upon your death, the assets get distributed to your beneficiaries.
Joint ownership of property
You should also consider joint ownership of property with the right of survivorship. When one owner passes away, the property automatically transfers to the surviving owner. Consider this strategy for real estate and other significant assets.
Designate beneficiaries for your retirement accounts, such as IRAs and 401(k)s, as well as your bank accounts and insurance policies. Regularly review and update these designations to reflect any changes in your life, such as marriage, divorce or the birth of children.
Utilize payable-on-death accounts
You can also set up Payable-on-Death designations for your bank and investment accounts. PODs allow these assets to transfer directly to the named beneficiaries upon your death.
Gift your assets
Reduce the size of your estate by gifting assets to your beneficiaries during your lifetime. Learn about of gift tax rules and limitations. Strategic gifting can help minimize the probate estate.
Small estate affidavit
Some jurisdictions offer a simplified probate process for smaller estates. Investigate whether your state allows for a small estate affidavit, which can expedite the distribution of assets without the need for a full probate proceeding.
Estate planning creates a smoother transition for your loved ones in the future.