How can people keep their assets out of probate court?

On Behalf of | Oct 29, 2024 | Probate Litigation |

Probate court helps to ensure that families follow an estate plan created by a testator. They can also help families manage the distribution of resources when an individual dies without an estate plan. The probate courts provide oversight and also create an opportunity for families to challenge misconduct during estate administration.

For as useful as they are, they can also be frustrating. Probate proceedings tend to take months, if not more than a year, to complete. They can diminish the overall value of an estate by generating legal costs. For many people thinking about their legacy and what may happen after they die, bypassing probate court is a top priority.

How can people keep their resources out of the probate courts?

By changing ownership of their assets

The simplest way of keeping property out of probate court is to prevent its inclusion in an estate. Establishing joint ownership with another person is a simple way to achieve that goal. By sharing ownership rights with another party, a testator can prevent specific assets from becoming part of their personal estate after their death.

Other times, they may change the owner on record by using the assets to fund a trust. Resources held by a trust are typically not part of an estate and do not have to pass through probate court after an individual dies. They may also decide to make gifts to some of their beneficiaries when they are alive to witness them enjoying their inheritance early.

By filing specific paperwork

Testators can retain sole ownership of assets while they are alive and still arrange for them to bypass probate court with the right planning. They can execute transfer-on-death designation paperwork for accounts ranging from their checking account to their retirement savings accounts.

Financial institutions with transfer-on-death designation paperwork on record can reassign ownership to an individual’s selected beneficiary when they present a copy of the original account holder’s death certificate. Those accounts don’t need to pass through probate for the new owner to take control.

Testators who want to limit how much of their property passes through probate court may benefit from exploring an assortment of different estate planning tools. People can frequently keep their most valuable property out of probate court with the right documentation.