Probate proceedings can be lengthy and costly, taking even a couple of months or years to be resolved. The longer a probate case lasts, the higher the cost, and this could leave your potential beneficiaries with less than you intended. The best approach would be to allocate assets in a manner that avoids the probate process. This paper will identify two ways of avoiding probate.
Joint Property Ownership
Joint owned property (with the "right of survivorship") avoids probate in one simple way: upon your death, your joint owner no longer has any right to a particular piece of property. Instead, the ownership of the property is transferred to "the living joint owner". For you to create a joint ownership with the "right of survivorship", you are required to have a document that establishes a joint ownership relationship, indicates the property that is subject to this relationship and the "right of survivorship". Some of the common forms of joint property ownership are:
Joint Tenancy: For example, you own rental properties as a joint owner. When you pass away, your share of the property will pass to the surviving tenant.
Tenancy by Entirety: This form of joint property ownership will apply if you are married. When you die, your share of a rental property ownership goes to your living spouse.
Community Property: This form of joint property ownership is applied to married couples in community property jurisdictions. According to this law, upon your death, your spouse becomes the full owner of a piece of property.
Some assets can be passed on to specified beneficiaries upon your demise. This means that you have to indicate that a certain person will be your beneficiary concerning a particular asset in the event of your death. Some of the financial assets that are subject to the "death beneficiary" laws include:
Payable on Death Accounts: These accounts have the instructions that in the event of your demise, the account is to be inherited by the beneficiary whom you name.
Retirement Accounts: When you establish 401(k) and IRA accounts, you are required to designate the person who is to take over ownership of the account when you pass away. If you are single, you can name anyone as beneficiary but if you are married, your spouse may inherit all or some of the money in the account.
Transfer on Death Registrations: Some jurisdictions allow people to transfer stocks, brokerage accounts, bonds and other securities without having to pass through probate. In these states, you are only required to sign a statement declaring the beneficiary of your vehicles or securities when you pass away.
Contact a probate lawyer for more information.