When someone passes away, the probate court supervises the administration of the estate by overseeing how the executor notifies creditors, pays debts and disburses the assets to the beneficiaries. Many clients prefer to avoid probate because the process can be time-consuming and expensive. Here are three common probate avoidance strategies:
For Real Property:
Joint Tenants with Rights of Survivorship. Using the language in the deed to convey property to the other owners by right of survivorship may avoid probate for the real property; however, there are situations where real property will have to be brought back into the estate. When a decedent dies while holding property in joint tenancy with another person, the property will pass to the surviving owner by operation of law.
For Financial Accounts:
Beneficiary Designation/Payable on Death. Many assets such as retirement accounts or regular checking accounts will allow for a beneficiary designation or payable on death designation to be placed on the account. In this case, when the owner of the account dies, it passes automatically to the beneficiary who is listed on the account. There must be a living beneficiary at the time of death or the asset goes into probate.
Trusts. One of the most common techniques utilized by estate planning attorneys is the use of trusts. Assets held in trust will pass according to the terms of that trust and will bypass probate proceedings. The trust must not only be created but also properly “funded”. Funding the trust means that the client transfers his/her assets into the name of that trust. Assets that remain in a decedent’s name at the time of death may be subject to probate.
For more information on estate planning to avoid probate in the Greater Baltimore area, please contact Stouffer Legal at 443-470-3599.