The bad news: probated estates are subject to a variety of costs from attorneys, executors, appraisers, accountants, courts, and state law. Depending on the probate's complexity, fees can run into tens of thousands of dollars.
The good news: probate costs can be reduced by avoiding probate. It’s really that simple.
Here are three simple ways to avoid probate costs by avoiding probate:
Name a Beneficiary.
The probate process determines who gets what when there is no beneficiary designation. So, naming a beneficiary is the easiest way to avoid probate. Common beneficiary designation assets include:
- Life insurance
- Retirement plans
Create and Fund a Revocable Living Trust.
A revocable living trust owns your property, yet you remain in charge of all legal decisions until your death. After your death, your named trustee manages your assets – according to your wishes. A trust works well if properly created and funded by an experienced estate planning attorney.
Own Property Jointly.
Probate can be avoided if the property you own is held jointly with a right of survivorship. There are several ways that you can establish joint ownership of property such as:
- Joint tenancy with right of survivorship – ownership simply transfers to other tenants upon your death;
- Tenancy by its entirety – is a form of joint tenancy with right of survivorship, but only for married couples in some states;
- Community property – property obtained during a marriage in some states;
State laws play an important role here. We can help you determine which form of joint ownership, if any, is a good fit for you.