If you use a will to record your final wishes, your estate would go through the process of probate. During this procedure, the executor that is named in the document would act as the hands-on administrator, and supervision would be provided by the court.
This is a general rule of thumb, but there are a couple of circumstances that can allow for a “relief of administration.” If the conditions meet the requirements, an affidavit can be submitted to request a relief of administration to avoid the full probate process.
The simplified procedure can be available if the estate is valued at $100,000 or less and a spouse is the sole inheritor of the estate. This can also be an option if the value of the estate does not exceed $35,000 and a spouse is not the only inheritor, or if there is no spouse.
Probate-Free Transfers
There are some types of transfers that are not subject to probate. When you establish a bank or brokerage account, you can name a beneficiary. These accounts are called payable on death or transfer on death accounts.
The beneficiary would not have access to the assets while you are living, so there would be no concerns on that level.
After your passing, the beneficiary would present the death certificate to the institution, and the assets would be released to the beneficiary if everything is in order. This transfer would not be subject to the probate process.
If you own property in joint tenancy, which is the condition of joint ownership, it would come with right of survivorship. The surviving joint tenant would become the sole owner of the property in question after the death of the other joint tenant. Probate would not be necessary.
The probate process is not a factor when life insurance proceeds are being transferred, and distributions to beneficiaries of individual retirement accounts are not subject to probate.
Probate Drawbacks
Probate will take about eight months at minimum in most jurisdictions, and the inheritors have to wait it out. No inheritances are distributed until the estate has been probated and closed by the court.
There are expenses that accumulate, including court costs, the executors fee, accounting and legal expenses, and appraisal and liquidation charges. The red ink will typically consume somewhere between three and seven percent of the estate.
You probably do not want everyone that is interested to know how you decided to distribute your resources. If you use a will as your primary asset transfer vehicle, the probate records would be readily available to the general public.
Revocable Living Trust for Probate Avoidance
A revocable living trust can be the ideal alternative to a last will if you want to facilitate transfers outside probate. There would be no loss of control, because you would act as the trustee while you are alive and well.
You would name a successor trustee to act as the administrator after your passing, and your heirs would be the beneficiaries. Since many elders become unable to make sound decisions at some point in time, you can name a disability trustee to prepare for this eventuality.
When the time comes, the trustee would distribute assets to the beneficiaries in accordance with your recorded instructions. The probate court would not be involved, so the heirs would receive their inheritances in a more timely and efficient manner.
In addition to the probate avoidance benefit, you can include spendthrift protections, and the consolidation of assets would streamline the administration process. You can also name a disability trustee to act as the administrator if it ever becomes necessary.
Access Our Free Worksheet
You can explore all of the written materials that we offer on this website to build on your knowledge, and we strongly encourage you to access our estate planning worksheet.
This valuable tool has been carefully prepared to provide you with a more thorough understanding of the process. It is being offered free of charge, and you can visit our worksheet access page to get your copy.
Schedule a Consultation Today!
As you can see, you can take measured steps in advance to ensure a smooth and efficient asset transfer process. If you are ready to get started, you can send us a message to request a consultation appointment, and we can be reached by phone at 513-721-1513.
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