Avoiding probate is a common goal in estate planning. Probate is the legal process of distributing a deceased person’s assets under court supervision.
It can be helpful to understand the benefits and drawbacks of bypassing this process.
Benefits of avoiding probate
Probate can be a lengthy and costly process, often taking months or even years to resolve. By avoiding probate, families can distribute assets more quickly and save on court fees and legal costs. In addition, probate is a public process, meaning the details of the estate, including asset values and beneficiaries, become part of the public record. Avoiding probate keeps these details private, protecting family privacy.
By clearly outlining the distribution of assets outside of probate, you can minimize potential conflicts among family members. This is especially important in families with strained relationships.
Drawbacks of avoiding probate
While most people think it is a good idea to avoid probate, there are several drawbacks to doing so:
- Upfront planning required: Avoiding probate often requires more detailed and complex planning. This might involve setting up trusts, joint ownership or beneficiary designations, which can require legal assistance.
- Potential for oversight: Without the oversight of a probate court, there is a higher risk of not following the deceased’s wishes precisely, especially if the documents are not clear or legally robust.
- Complexity in large estates: For larger, more complex estates, avoiding probate can be particularly challenging.
Without the structure of probate, managing and distributing a variety of assets efficiently and fairly can become complicated.
How to avoid probate
To avoid probate, individuals often use methods such as revocable living trusts, naming beneficiaries on accounts and policies (like life insurance and retirement accounts), and owning property jointly with rights of survivorship. Each method has its nuances and you should consider them carefully with the help of legal counsel.
Avoiding probate can provide significant benefits, but it also has potential drawbacks. Considering these factors, you can determine the right approach for your circumstances. This will help ensure that your estate is handled according to your wishes while minimizing the burden on your loved ones.