You already understand the importance of creating an estate plan. It can give you and your loved ones peace of mind, knowing that your affairs are in order and your assets will be distributed according to your wishes.
However, if your estate goes through probate, it could take weeks, months or even years before everything is settled. Fortunately, there are ways you can avoid probate and ensure the timely transfer of your assets to your heirs.
What is probate?
Probate is the legal process of settling your affairs after you die. The key steps include:
- Filing the will and Petition for Probate with the county district court
- Creating an inventory of the deceased’s assets
- Paying outstanding debts and taxes
- Distributing the remaining assets per the will’s instructions
While the probate process can seem straightforward, it can be problematic for the following reasons:
- It’s time-consuming
- The process can be costly with court fees, legal fees and appraisal fees
- When an estate goes through probate, it becomes part of the public record, meaning anyone can access the details of the estate, including assets, debts and beneficiaries
You have some options if you want to keep your estate out of probate:
- Create a trust that allows you to transfer ownership of your assets to the trust, which are then transferred directly to the trust’s beneficiaries after you pass away.
- Have joint ownership of real estate and bank accounts with transfer-on-death designations.
- Designate beneficiaries on life insurance policies, retirement savings and investment accounts.
- Give gifts while you’re alive. The IRS allows you to give up to $19,000 per person without tax liabilities.
Estate planning is more than just determining how your assets will be distributed after your death. Seeking legal guidance can help you structure your estate plan so it can bypass probate.