Proper estate planning is vital when you don’t want your hard earned assets to end up becoming long legal complications that could end up causing bad blood between family members upon your death. Such instances can burden your beneficiaries and others involved, forcing them to sort out asset distribution in probate court.
Probate is unnecessary, complicated, and lengthy. Sometimes, proceedings can take a long time even when probate is simple. Larger estates can take a year or longer, especially when riddled with complex legal issues, in turn causing your beneficiaries to lose a significant amount of money through attorney and court fees or estate taxes.
The estate planning tips highlighted here can help you avoid probate:
1. Gift Away Your Property
Transferring your property before you die can help avoid probate. Gifting various beneficiaries with your assets could be a good part of your overall estate plan. However, you can’t give away all your property since you’ll need some of it while you’re still alive.
The main drawback of this strategy is that you won’t have control of the property once you give up ownership. Clearly state your intentions in writing to prevent people from claiming a share in other assets on probate.
2. Create Pay-on-Death Financial Accounts
Bank and similar finance accounts can be designated to beneficiaries in the event of your death. This is a preferable option because beneficiaries only have rights to the funds once the primary owner dies. Assigning your beneficiaries typically is as easy as completing some forms provided by the financial institution.
Accounts are closed, and funds are transferred to beneficiaries upon death. You may designate two or more beneficiaries. However, you can’t designate successor beneficiaries, where your funds go to the first successor and are transferred to a second successor if the first one has died.
3. Designate Your Property to Transfer-on-Death
You can set up your property to transfer on death, allowing recipients to gain ownership upon your death. Do this if you have rental properties that provide income or a house you don’t want to be sold off to settle other debts.
4. Create a Living Trust
Living trusts are a good option for people in many situations. Creating a living trust transfers property ownership to a trust (a separate entity), making you a trustee. You’ll have complete control of the property when alive; however, you must appoint a successor trustee that transfers the property to designated trust beneficiaries upon your death.
The transfer doesn’t require probate, and the successor can manage your trust if you become mentally incapacitated. Note that attorney fees can be substantially higher than those for creating a will. However, these fees are often less than those incurred during probate.
Engaging in proper estate planning can help your loved ones avoid probate court and the expense of court and attorney fees, which can diminish a significant chunk of your estate. Additionally, estate planning helps avoid lengthy probate cases that can cause undue stress to your beneficiaries. The experienced team at Foley Law Offices in Livonia can help Metro Detroiters create a solid estate plan that protects your property, your people, and everybody’s pocketbook. Prepare for the unknown and unexpected. Start your estate plan today!