Avoiding probate saves your estate both time and money. It can also add an element of privacy to the distribution of your estate assets for those who want it. To effectively avoid probate, however, you need to include a probate avoidance component in your comprehensive estate plan. Toward that end, the Los Angeles estate planning attorneys at Schomer Law Group, APC discuss common probate avoidance tools and strategies.
Why Is Avoiding Probate Important?
Even a relatively simple estate will take months to get through the formal probate process because the law requires an estate to remain open long enough to allow creditors to file claims against the estate. The need for formal probate also diminishes the value of the estate you leave behind because of the expenses involved in probating an estate. Finally, your Will becomes public record when submitted for probate, meaning anyone can learn the details of estate distribution. For these reasons, people often choose to include probate avoidance as an important estate planning goal.
Tools and Strategies for Avoiding Probate
To effectively avoid formal probate, you will need to incorporate tools and strategies into your estate plan aimed at helping you achieve that goal. The number one key to avoiding probate is reducing the probate estate you leave behind because not all assets are required to go through the probate process. Some common tools and strategies used to avoid probate include:
- Using a trust as your primary asset distribution tool. A Last Will and Testament is not the only option for distributing your estate assets. Consider using a trust instead and executing a Pour Over Will as a backup tool. Assets held in a trust bypass the probate process altogether, meaning they can be distributed immediately if the terms of the trust call for them to be.
- Gift while you are alive. California, like most states, offers an alternative to formal probate for smaller estates. The small estate alternative is significantly faster and simpler than formal probate. By making lifetime gifts instead of waiting until your death, you decrease the overall value of your estate at the time of your death. Consequently, your estate may qualify for the small estate alternative to formal probate.
- Work with an estate planning attorney. The most important of all tips is to consult with an experienced California estate planning lawyer when you create your initial estate plan, as well as throughout your lifetime to ensure that any available probate avoidance strategies and tools have been considered.
- Title property jointly with rights of survivorship. Your interest in your house, for example, could transfer directly to a spouse or adult child without the need to go through probate after your death if the property is titled correctly.
- Change the designation on financial accounts to “payable on death (POD)” or “transfer on death (TOD).” Assets held in a financial account, when designated as POD, will automatically become the property of the designated beneficiary upon your death; however, the beneficiary has no legal rights to the assets while you are alive.
- Make use of life insurance. Life insurance proceeds are non-probate assets and, therefore, are paid out directly to the beneficiary after your death. Consider using them to fund a funeral trust which then pays for your funeral.
- Choose the right Executor. While this may not result in avoiding probate entirely, it will impact the efficacy of the overall probate process. Your Executor oversees the entire probate process. A common mistake made by Testators is to appoint a spouse, friend, or relative without stopping to consider if the individual has the temperament, experience, skills, and/or ability to move your estate through the probate process expeditiously.
Contact Los Angeles Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about how to include probate avoidance in your estate plan, contact the experienced Los Angeles estate planning attorneys at Schomer Law Group APCby calling (310) 337-7696 to schedule an appointment.