One of the most important aspects of estate planning is finding ways to keep your assets out of probate. This comes with several advantages, including avoiding probate fees and the delay of asset distribution.
Transferring ownership of assets to a trust
When you create a trust, you can transfer ownership of your assets to the trust. This means that the assets will not be part of your estate and will not go through probate. There are several types of trusts, including revocable and irrevocable trusts. If you want to be able to access the assets in the trust, you should create a revocable trust. If you wish to have the assets distributed according to your wishes after you die, you should create an irrevocable trust.
Giving assets away
Another way to keep your assets out of probate is to give them away while you are alive. You can give gifts up to a certain value each year without incurring any gift tax. If you give someone an asset, such as a piece of property, they will own it and it will not be part of your estate.
You can name beneficiaries for some of your assets, such as life insurance policies and retirement accounts. When you die, the assets will likely get paid to the beneficiaries and will not go through probate. To get started, you will need to name the beneficiaries on the account or policy. You should also update your beneficiaries if your circumstances change.
Creating a living trust
A living trust is another estate planning document that can help you transfer ownership of your assets to the trust while you are alive. The assets in the trust will not be part of your estate and will not go through probate. You can also name a successor trustee to manage the trust after you die.
While it may take some time to plan, it really is possible to keep your assets out of probate. Just remember that you can use more than one method to keep your assets out of probate to make sure your estate is handled according to your wishes.