What Is Probate and How Can It Be Avoided?
I’m sure many of us can agree that when we pass away, we’d like to give our belongings to those closest to us. The loss of a loved one is never easy, and the last thing we would want is for everyone to worry about what will happen to our property and assets.
It would be a shame to have all of our hard-earned money and savings go to the government in probate fees, which is what we’re going to cover in this blog post.
What exactly is probate? And is there a way to avoid it?
What Is Probate?
Probate is a legal procedure where a court decides how a person’s property will be distributed after they pass away. In other words, it is the process of giving property to a beneficiary or an heir.
During probate, the court appoints an attorney to ensure that all debts and taxes on the property are paid. They also make sure that the property is divided into the appropriate parties.
This process varies from state to state because of different property laws. However, usually the assets start with a spouse and are then divided between other family members.
Reasons to Avoid Probate
There are many reasons why people may want to avoid probate. Here are a few of them:
1. It Is Expensive
The process of going through probate isn’t cheap. There are many fees that have to be paid, including attorney’s fees and appraiser’s fees. According to Investopia, probate can easily cost from 3% to 7% or more of the total estate value.
2. It Is a Slow Process
There are many hoops to jump through when dealing with probate. The amount of time that it takes to complete this process varies depending on each situation, but it typically averages from around six months to over a year.
3. It Is Public
Many people may not know this, but everything from the probate court goes into public record. This means that anyone has access to detailed information such as property, finances, and names of family members.
4. It Can Cause Disputes
Even if the deceased member has a will, oftentimes, it can be difficult for a house’s value to be spread equally amongst heirs. This is especially true if there are several people listed in the will. However, if there isn’t a will, you can imagine how this could cause even more disputes among living relatives.
How Can You Avoid Probate?
If the above situations sound too stressful, you may want to avoid probate altogether. Here are a few ways to do so.
1. Make a Will
The purpose of a will is to distribute your assets upon death. Anyone can draft this document, but it is advised that you hire an attorney to help. Although having a will doesn’t avoid probate, it is an important way to help minimize the cost of probate.
2. Have a Living Trust
Unlike a will, a living trust places your property and all assets to a trustee. This enables you to avoid probate completely because everything is already distributed to the trust.
Although the attorney’s fees for setting up a trust are more than drafting a will, a trust can be less than the cost of probate in the long-run.
3. Joint Ownership of Property
Any property can be held jointly, such as a car, home, or bank account. This means that if the owner dies, the title of that property will automatically be passed to the surviving owner.
Although this makes it much less complicated, you must remember that a joint owner has certain rights in the property, such as the ability to withdraw money from a bank account at any given time.
4. Give Away Assets
Another way to avoid probate is to give away some of your assets as gifts while you are still alive. For example, you may choose to give a plot of land to your child. However, make sure that you clearly state this in writing so that there is written proof in your overall estate plan.
5. Have “Payable-on-Death” Accounts
For bank and other financial accounts, it is usually possible to name someone as a beneficiary if you pass away. All you have to do is fill out a form from your bank. Upon death, all of your funds are paid to the beneficiary and afterwards, the account with your name on it will close.
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You may prefer to skip all of these suggestions and sell your home right now for cash. Whether it is your own home or one that you have inherited, a cash buyer is a great option if you want to sell fast. If there are too many repairs or you don’t want to deal with the hassle of probate, consider selling to Blackjack Real Estate. We are trusted cash home buyers in Pensacola and we buy houses in any condition!
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