There are many qualms when it comes to estate planning. However, one that is often presented during the drafting process is probate. Specifically, they seek to understand estate planning methods to ensure their heirs and beneficiaries will not have to deal with probate.
While probate often gets a bad reputation because it could present issues with costs and timeline, the reality is that it is often a necessary step that needs to occur during estate administration. However, it is important to note that probate is not always necessary. Which is why it is important to understand what probate is, when it is required and when it is not necessary.
Probate and ways to avoid it
The probate process is initiated when the validity of a will must be proven. If there are complex issues, such as a will being contested, probate will be necessary to resolve these issues and administer the estate. The idea that probate could cause a lengthy and costly legal matter is often why individuals seek to avoid probate by using specific estate planning tools.
It is possible to structure your estate plan so you can minimize your estates exposure to probate or avoid it entirely. A simplified probate process helps your loved ones receive their inheritances without the need to go through the time-consuming process of a probate case.
When probate is not necessary
While trusts are known to commonly be used as a probate avoidance tool, it is not the only mechanism or tool used in an estate plan to help minimize or avoid exposure to the probate process. This includes joint ownership of property, such as real estate and vehicle, beneficiary designations for bank accounts, retirement accounts and life insurance policies, death deeds and affidavits for transfer without probate.
As referenced above, trust can be a very useful estate planning tool, as it maintains privacy, helps avoid probate court proceedings and it reduces estate taxes. Thus, both revocable and irrevocable trusts should be considered beyond just probate avoidance.
The estate planning process is rarely simple and straightforward because we often live complex lives with a wide range of needs and concerns during our lives and following our death. Therefore, it is important to understand your options when it comes to estate planning tool and meeting your goals and needs now and for the future.