Ways to Avoid Probate

On behalf of Peterson, Berk & Cross, S.C.

Mention the word “probate” or “probate court” and you will likely receive a negative comment in response. But what exactly is probate and why would you want to avoid it?

What is Probate?

Probate is the legal process of distributing someone’s assets after they die. Probate courts review the individual’s assets and their Last Will and Testament (if one was created) and issue a ruling on how the assets will be divided and distributed to the person’s beneficiaries.

Reasons to Avoid Probate

Probate serves an important purpose—making sure someone’s assets are distributed according to their Will or the law after they die. But there are several reasons to avoid probate, including the following:

  • Probate can be time-consuming: the probate process can be lengthy, thereby delaying the distribution of assets to beneficiaries
  • Probate can be expensive: probate involves attorney fees, court fees, and the additional costs associated with administering the estate
  • Probate is public: probate is part of the public record, and the specifics of a person’s assets and debts are available for anyone to see, which can be a concern for those who want privacy

Steps to Avoid Probate

In your estate plan, there are ways to avoid the probate process:

  • Designate beneficiaries on retirement accounts and life insurance policies: by naming beneficiaries on these policies, the assets can pass directly to the designated beneficiary without having to go through the probate process
  • Establish a revocable living trust: a revocable living trust allows you to retain control over your assets while you are living. Upon your passing, the assets in the trust are distributed directly to your beneficiaries according to the terms of the trust, without having to go through probate
  • Establish joint ownership: by holding assets in joint ownership with another living relative, such as a spouse or child, you can avoid probate. When one of the joint owners passes, the surviving owner automatically becomes the sole owner of the asset
  • Establish Payable on Death (POD) Accounts: POD accounts are similar to beneficiary designations; the assets are distributed directly to the beneficiary after the owner dies, without the need for probate

To develop an estate plan that is customized to your needs, consult with an experienced estate planning attorney.