A comprehensive estate plan can accomplish a wide range of inter-related goals. Making sure that loved ones are protected and financially secure after you are gone may be one of your estate planning goals. If so, you may also want to include probate avoidance as a goal to ensure that you loved ones actually receive the assets you left them in a timely manner. To help you get started, the probate attorneys at DeBruyckere Law Offices offer some tips for avoiding probate.
Why Is Avoiding Probate So Desirable?
When most people die, they leave behind an estate that consists of all assets, both tangible and intangible, owned by the decedent at the time of death. Probate is the legal process by which those assets are identified, located, valued, and eventually distributed to the intended beneficiaries and/or legal heirs of the estate. If your estate goes through probate, the terms of your Will, and therefore the gifts you made in that Will, become public record which is one reason people actively try to avoid probate. Probate is also time-consuming. In New Hampshire, creditors have six months to file claims. Consequently, probating even a modest and uncomplicated estate typically takes a minimum of about eight months. Often, the probate process can take a year or longer, meaning beneficiaries must often wait a long time to receive their intended gifts. Probate is also expensive because everyone involved in the probate of an estate, including the Executor/PR, attorneys, appraisers, real estate agents, and accountants, is entitled to a fee for their services.
What Can I Do to Avoid Probate?
The good news is that with careful planning you should be able to structure your estate so that the majority of your estate bypasses probate. The following strategies can help:
- Diminishing the value of the estate you own at the time of death through lifetime gifting. Only assets owned by you at the time of your death are potentially subject to going through probate. With that in mind, gifting assets while you are still alive instead of waiting until your death is an excellent probate avoidance strategy. In addition, there are often tax advantages to lifetime gifting that may further benefit your estate.
- Using a trust to distribute assets. Assets held in a trust are non-probate assets and can be distributed immediately if the trust terms dictate. Most assets, including you home, can be held in a trust. Using a trust as your primary method for distribution of your estate assets can dramatically reduce the size and value of your probate estate.
- Designating accounts as POD or TOD accounts. The manner in which assets are titled can also be used to avoid probate. Real property, for example, can be held jointly with rights of survivorship, allowing your interest in the property to pass directly to the co-owner upon your death without first going through probate. Certain accounts can also be designated as “Payable on Death (POD)” or “Transfer on Death (TOD)” accounts which allows you to designate a beneficiary who will automatically become the owner of the assets held in the account upon your death. Unlike jointly held assets, however, a beneficiary of a POD or TOD account has no ownership interest in the asset while you are alive.
- Titling assets jointly with rights of survivorship. Certain types of jointly held property will bypass probate. The key is that the property must be held jointly with rights of survivorship. Your interest in jointly held property with rights of survivorship will pass directly to the co-owner upon your death.
If you are unable to arrange for your entire estate to avoid probate, making use of small estate alternatives to formal probate is the next best thing. For assets that remain part of the probate estate, a small estate alternative to formal probate may be used in New Hampshire if the remaining estate qualifies. The small estate administration can significantly shorten the time it takes to get through the probate process.
Contact New Hampshire Probate Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions about strategies for avoiding probate, contact the New Hampshire probate lawyers at DeBruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.