The Baby Boomer Renaissance: Consumer Boomer

Wednesday, September 1, 2010

Consumer Boomer

Posted: 01 Sep 2010 04:14 AM PDT

As a general rule, avoiding probate court is ideal whenever possible. While you may have heard of this advice, unless you have been through the process you might not understand why. In a nutshell, probate describes the process or procedure used to settle the estate of a person who has passed away. When an estate is in the probate process, all steps are court supervised which can result in a long, drawn out process that can quickly become expensive due to attorney fees and court costs. This is one of the reasons why most people would prefer to avoid probate, another is the amount of time an estate could be tied up in legal proceedings. To make it easier on your loved ones and reduce the stress and burden of dealing with an estate in probate, consider the following tips to ensure your estate is handled with the least amount of difficulty.

photo credit: mliu92

Estate planning for Probate

The easiest way to avoid probate is by taking steps today to plan for the handling of your estate. The following are popular ways to pass property and assets directly to your beneficiaries without going through probate.

Name your beneficiaries- Life insurance policies and retirement plans allow the owner of the account to determine who will receive these assets at the time of death. By naming your beneficiaries you bypass any probate of these assets as they are contractually obligated to pass to the beneficiary named.
Living trust- Sometimes referred to as a revocable living trust or revocable trust, this tool is intended to help people avoid probate. A living trust can be set up by an estate attorney and gives the creator the opportunity to re-title all of their assets to the trustee (who can also be the creator of the trust). This allows you to retain control of your assets for as long as you wish including making changes to the trust. At the time of your death, all of your assets will be a part of the living trust which is not considered part of your estate. This allows the successor trustee (determined by you) to control the trust and administer it as you have directed.
Set up payable-on-death accounts- Depending on the state in which you reside, you can convert bank accounts, retirement accounts, vehicle registrations and more to your beneficiaries at the time of your death. This will prevent these assets from going into probate.
Joint ownership for property- If you do not want property to go into probate, consider joint ownership which will automatically transfer the property to the other person named on the deed at the time of your death.
Gifts- Another popular way to avoid probate is to gift your property or assets to beneficiaries while you are still alive.

Keys to Avoiding Probate

When you plan your estate properly you can ensure your assets get passed on to the people intended without the hassles and cost of going through probate. Your loved ones will benefit from your foresight by not having to deal with the additional burden of probate at an already difficult time in their lives.