Does An Estate Enter Probate If the Owner Dies Without a Will?
Probate is a court-supervised proceeding involving the verification the Testator’s will. Probate can be a lengthy and expensive process. The delays cause by probate can expose beneficiaries to financial hardships. In addition, probate documents are public record. It’s no wonder estate owners want to avoid probate.
Many people wrongly believe that if they don’t write a will, they can avoid probate. If a person dies without a will, their estate is distributed according to the state’s intestate succession laws.
Similarly, if a person does not provide clear healthcare instructions and becomes physically or mentally incapacitated, the decisions related to their healthcare are taken in accordance with the laws of the state.
With proper planning, probate can be avoided. Probate lawyers in Santa Rosa recommend the following methods to avoid probate.
Own Property Jointly
Jointly owned property passes directly to the surviving co-owner without going through probate. There are primarily three ways to own property jointly with another person.
- Joint tenancy with the right of survivorship: Under this method, owners are joint tenants. If one of them dies, the ownership of the jointly held property automatically passes to the surviving joint tenant
- Tenancy by the entirety: Only married couples, including same sex married couples in select jurisdictions, can use the method to hold property
- Community property: States with community property laws allow spouses to hold property jointly
Give Away Property Within Your Lifetime
Instead of leaving property for their loved ones after their death, many estate holders transfer ownership of assets to them while they’re alive. Since they don’t own the assets that they gifted to their friends and family members within their lifetime, those assets don’t go through probate after their death. This practice can significantly lower the cost of probate.
Set up a Revocable Living Trust
One of the most popular and effective ways to avoid probate is to create a revocable living trust. The assets held in a trust do not go through probate after the estate owner passes away, allowing the trustee to swiftly and easily transfer them to the beneficiaries-specified in the trust document.
Beneficiary Designations
Assets such as 401(K)s, IRAs, and annuities have designated beneficiaries. The ownership of these assets is usually automatically passed to the designated beneficiary on the estate owner’s death.
Pay-on Death Accounts and Registrations
Many states allow estate holders to convert their bank and retirement accounts to pay-on death or POD accounts.
To convert an account to a POD account, the account holder should fill out a form and list a beneficiary. When the person does, the money in the account goes directly to the beneficiary.
You may even be able to set up a transfer-on death or TOD account by naming a beneficiary for your investment accounts.
Need help with estate planning in Santa Rosa? Johnston & Associates Law has got you covered. We use tried and tested methods to minimize estate tax liability. To make an appointment with one of our experienced attorneys, call (707) 545-6542.