Every testator who is putting together an estate plan has unique concerns. Some people worry about paying for nursing home care when they age. Others focus on providing support for a child with special needs.
In a variety of scenarios, one of the testator’s main objectives might be keeping their property out of probate courts as much as possible. Assets that pass through probate court are at risk of creditor claims. Loan companies, healthcare providers and even Medicaid could try to lay claim to that person’s property before it passes to their beneficiaries.
Those with larger estates may worry that having assets pass through probate court could lead to tax obligations. They may also want to limit the risk of loved ones fighting over their estates. How can testators plan to keep resources out of probate court?
Changing ownership arrangements
The assets that belong solely to one person become the property of their estate when they die. In scenarios involving joint ownership, an asset may have protection from probate proceedings. For example, if someone holds title to their home as a joint tenant with rights of survivorship, their co-tenant receives their interest in the property immediately at the time of their death. Arranging to change the ownership of assets while someone is still alive is one way to keep resources out of probate court.
Funding a trust with personal property
One of the ways people change the ownership of valuable resources involves using those assets to fund a trust. Provided that the transfer occurs prior to someone’s death, the assets held in a trust may not require probate oversight after someone’s passing. Instead, the trustee simply follows the instructions provided by the testator to manage and distribute trust resources.
Arranging for posthumous transfers
People don’t necessarily want to share ownership of their assets with others while they are alive. Particularly when it comes to financial resources, retaining sole ownership throughout one’s life might be a priority for a testator. It is possible to arrange for financial accounts to transfer to someone without passing through probate court. Those who file the appropriate paperwork with their financial institutions can plan to have specific beneficiaries assume control over certain resources when they die.
The best arrangements for bypassing probate court depend on someone’s personal holdings. Creating an inventory of assets and reviewing estate planning goals they help people better strategize to minimize probate oversight. Those who use a variety of estate planning tools may find it easier to transfer resources without involving the probate courts than those who use basic documents only.
