Estate administration can take months to complete and can be relatively costly. Probate proceedings delay the distribution of property to the beneficiaries of an estate. Typically, the personal representative of the estate must fulfill various estate administration responsibilities before making final distributions to beneficiaries and heirs.
The cost of estate administration can diminish how much property the estate contains. Creditors and tax authorities can make claims against the estate during the probate process, which can also reduce how much beneficiaries ultimately inherit. People hoping to maximize the legacy that they leave when they die may want to limit or even eliminate the probate expenses and creditor claims that could prevent their loved ones from inheriting their resources.
Can estate planning help people keep their assets out of probate court?
Proper planning can make a major difference
If an estate plan only contains a will, then the chances are good that most of the valuable property in the estate must pass through probate court before the personal representative distributes resources to heirs or beneficiaries. However, thorough estate planning can help exclude certain resources from the probate process.
Wills don’t help assets bypass probate court, but other types of documents can. Testators who establish trusts can change the ownership of some of their most valuable assets. Real property, financial accounts and even businesses could help fund the trust and could bypass probate court entirely if held by a trust.
Testators can also make arrangements to transfer certain assets directly to beneficiaries when they die. Transfer-on-death designations submitted to financial institutions could keep the banking accounts and retirement savings out of probate court.
In some cases, people may choose to add co-owners to their assets and arrange for those co-owners to inherit their share of the property at the time of their passing. There may be other solutions available as well for those who aspire to keep their most valuable resources out of probate court or to speed up how quickly their beneficiaries gain control over those assets.
Reviewing personal holdings and legacy goals with an attorney can help people limit probate complications and expenses. Those who hope to limit probate challenges and delays may need to craft specialized estate plans based on their personal priorities.
