One of the things that you may want to do when you start estate planning is to look into ways that you can avoid or minimize probate. Probate can be costly and time intensive, so it makes sense to want to eliminate the risk of your family having to go through it after you pass away.
Fortunately, there are some good techniques that can be used to plan for the distribution of your assets and to avoid probate. Using these techniques may help you completely eliminate the risk of probate or minimize it to a point where it isn’t very problematic in the future. Here are a two options.
- Beneficiary designations
The first thing to consider setting up is your beneficiary designations for assets or insurance proceeds. Beneficiary designations are designed to name a specific beneficiary for that asset and to pass it on to them immediately following your death (or once the terms of the agreement are met). For example, if you have an insurance policy, it may pass outside of probate if you have a beneficiary designation set up. If you don’t, then the insurance policy will pay into the estate instead, and then it may need to go through probate to determine who the rightful heir is.
- Living trusts
Another tool that you may want to use is a living trust. A living trust allows you to transfer assets into the trust directly. Then, your appointed trustee can manage those assets without needing to go through probate. This reduces the cost of distributing your estate and makes the entire process less time-consuming.
Don’t let probate cause extra stress for your family
Probate can be costly, time-consuming and upsetting to people who are dealing with the loss of a loved one. For that reason, it is wise to do all you can to keep your estate out of probate. Early planning and the use of helpful techniques like these may minimize the risk of your estate ending up in probate and make sure that your family is able to receive inheritances and assets that you’d like to leave behind for them more easily.