Residents of New York State who are getting their estate planning documents in order might want to make the process as easy as possible for their heirs. Part of that is keeping costs in line. Since probate is expensive and can take a long time, many people who are formulating their estate plan will want to create strategies to avoid it. There are several ways to do this and it is important to understand them beforehand. They are the following: joint property ownership, death beneficiaries, having a revocable living trust and giving the assets as gifts.
To avoid probate with joint property ownership, there must be a right of survivorship and the property goes to the joint owner upon death. People who are using the right of survivorship will be joint tenants in the property. Then it will go to the beneficiary without probate. With death beneficiaries, the assets will become the property of the person who is designated as the beneficiary. They will not be part of the estate and will not be subject to probate. Examples include retirement accounts and payable on death accounts.
A revocable living trust transfers property to another person – also referred to as the trustee – to hold it for the testator. This can be revoked at the person’s discretion. The trustee owns the property, but the person who drafted the document will have the property used for his or her own benefit. A trustee can be told to transfer the property to others after the testator’s death. This keeps the estate from probate. The property will no longer be part of the estate once it is part of the revocable living trust and will not be subject to probate. Finally, there is the simple act of giving a gift. In general, this should be done with items that are not exceedingly valuable as there can be taxes attached to them. But giving the items as a gift can avoid probate.
Everyone who is crafting an estate plan will have different assets, goals and desires. It is vital to understand how to achieve one’s plan for the estate. If avoiding probate is important, having legal help with the alternatives available is key. Contacting a legal professional who is experienced in all facets of estate planning is the first step toward having a comprehensive document.
Source: estate.findlaw.com, “Avoiding the Probate Process,” accessed on Sept. 5, 2017