This post provides you with 3 simple ways to avoid probate costs. All of which can help you and your beneficiaries save money.

The Bad News

When a deceased person’s estate has to go through probate, it can be subject to a variety of costs stemming from attorneys, executors, appraisers, accountants, courts, and state law. Depending on the probate’s complexity, fees can run into tens of thousands of dollars.

The Good News

Many of these probate costs can be reduced by avoiding probate. It’s really that simple.

1. Name a Beneficiary

The probate process only applies to those accounts or other property that are in your name at your death. By naming a beneficiary, these accounts and other property will be transferred to the named individual without any court involvement. Depending on your states, common beneficiary designation assets include: 

  • Life insurance
  • Annuities
  • Retirement plans
  • Real estate

Caution: When someone is named as a beneficiary through the use of a beneficiary designation, they will receive that account or property outright. This could subject the account or property to claims asserted by the beneficiary’s creditors.

2. Create and Fund a Revocable Living Trust (RLT)

Once the RLT has been created, you need to transfer the ownership of your accounts and property by re-titling them into the name of the trust. You will remain in charge of all legal decisions until your death as the trustee. You’ll still retain the enjoyment of those accounts and property as the current beneficiary. After your death, your named successor trustee will manage and distribute your assets – according to your wishes. A trust works well if it is properly created and funded by an experienced estate planning attorney.

A Revocable Living Trust (or Trust as most people know it) is one of the most common planning tools we use for our clients.

3. Own Property Jointly

Probate can be avoided if the property you own is held jointly with a right of survivorship. This is similar to a beneficiary designation. Joint ownership has the effect of automatically transferring the ownership upon your death. There are several ways that you can establish joint ownership of property, such as:

  • Joint tenancy with right of survivorship – ownership simply transfers to other tenants upon your death.
  • Community property with right of survivorship – property obtained during a marriage in some states.

State laws play an important role here. We can help you determine which form of joint ownership, if any, is a good fit for you.

Caution: Just as with a beneficiary designation, adding a joint owner can subject the accounts or property to claims asserted by the new joint owner’s creditors. This vulnerability begins the moment they are added. Your accounts or property could be seized by your new joint owner’s creditors even while you are still alive.

We Have the Tools to Help You

Use these 3 simple ways to avoid probate costs. Call or text our office at (805) 518-9633 or click here to schedule a {Free} 15-Minute Phone Call.  As an added convenience for our clients, we are available to hold our meetings through video conferencing using zoom or by phone. We are here to help you decide whether it makes sense to avoid probate in your particular case and, find the best way to do so.