Probate is the legal process of transferring property, such as real estate, after someone passes away. This process can be lengthy, often taking eight to twelve months, and can be a significant burden on your loved ones. However, with proper planning, you can avoid probate altogether and ensure your assets are distributed smoothly. Here are five essential tips to consider.

1. Consider the Size of Your Estate

Typically, only large or complex estates go through the formal probate process. Many states have probate exemption levels and offer accelerated probate for estates under a certain size. Understanding your state’s limits for probate is a crucial part of estate planning. It’s also important to know what your state counts toward the value of your estate. For example, some states don’t consider payable-on-death accounts, vehicles, or real estate located in another state when determining the size of your estate.

2. Create an Estate Plan

Even if your finances and estate seem simple, consulting with an estate planning attorney can help you determine the best approach to keeping your assets out of probate. An estate planning attorney will ensure your assets are distributed in the manner you desire and can help minimize the impact taxes can have on your assets before or after your beneficiaries inherit them.

3. Set Up Joint Ownership

If you want to ensure that your home or other property goes to your partner after you pass, both of your names need to be on the deed. Spouses often own their real estate jointly, which means that ownership passes to the surviving owner without the need for probate. This can also apply to unmarried partners or anyone who owns property together, as long as both names are on the deed.

4. Create a Living Trust

A living trust is another option to prevent your assets from ending up in probate after you die. A living trust is a legal entity that allows you to designate beneficiaries who will receive your assets after you die. As the grantor of the trust, you’ll be able to set it up and create rules for how the assets within your trust fund are managed, accumulated, and distributed. You’ll need a trustee to manage the trust fund, and you can designate anyone to be your living trust’s trustee or choose to use a firm.

5. Designate a Beneficiary

In some states, you can deed your real estate or vehicle to a specified beneficiary after you die, such as a spouse or child. This is known as a transfer-on-death beneficiary. You can also designate beneficiaries for certain types of bank accounts, such as your savings account. Having a payable-on-death (POD) account not only helps avoid probate but can help your loved ones get access to cash to settle your estate.

Do Wills Help Avoid Probate?

A will, formally known as a last will and testament, is a legal document that spells out what you want to happen to your property after you pass away. While having a will doesn’t help you avoid probate, it can speed up the process. After you die, a probate court will confirm that the will is legitimate and provide authorization to the individual you named as executor to carry out their duties.

The Bottom Line

If your estate goes into probate after you pass away, it could cause delays in the distribution of your assets. This can be particularly challenging if your family is relying on the resources you wanted them to have after your death. To avoid probate altogether, consider transferring assets while you’re still alive, creating a living trust, or designating beneficiaries on certain types of accounts. Meeting with an estate planning attorney can help you figure out the best options for you and your loved ones.

For any mortgage service needs, contact O1ne Mortgage at 213-732-3074. Our team of experts is here to help you navigate the complexities of estate planning and ensure your assets are protected.