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Top Tools to Avoid Probate

One of the most common questions we get when helping people make their estate plans is how to avoid probate. In some cases, probate is unavoidable. However, there are many things you can do to avoid probate using specific estate planning tools. Here are the top estate planning tools and documents you can use to avoid probate. 

Beneficiary Designations 

Beneficiary designations are people listed to inherit or receive a specific asset after you pass away. The insurance company or financial institution will automatically pass these assets to the named beneficiary listed on your account after you pass away. Assets with beneficiary designations include: 

  • Life insurance policies
  • 401(k) plans
  • Certain types of bank accounts
  • Annuities
  • IRAs
  • Certificates of deposit
  • Savings bonds

Assets with beneficiary designations pass automatically to the next successor named on the asset. Beneficiaries designated on these assets take precedence over the beneficiary listed in a will. This means that the named successor on the asset will inherit it, even if a different person is listed in your will. Make sure the person you want to receive the asset is listed as the beneficiary and update beneficiary designations after life changes, such as marriage or divorce.

Assets with Rights of Survivorship 

Assets with a Right of Survivorship clause won’t go through probate. These are assets you jointly own with someone else that have “payable upon death” or “transfer upon death” clauses. The asset’s ownership is automatically transferred to the other living owner when you pass away.  

Homestead Properties

If you own a homestead property and pass away with your spouse or a minor child still living, your property won’t need to go through probate. Another way to avoid your home going through probate is to put it into a revocable trust, which we discuss below.

Revocable Living Trusts 

One way to avoid probate is to create a revocable living trust, which automatically transfers assets to beneficiaries after you pass away and can be modified during your lifetime. There are several types of assets that can be placed in a trust, such as real estate property, bank accounts, safety deposit boxes, stocks, and bonds. 

Summary Administration 

Summary administration, or summary probate, is a simplified probate process for small estates valued at less than $75,000 (minus exempt assets and property). An estate may also qualify for summary administration if creditors aren’t allowed to make claims against the estate or the decedent passed away more than two years ago. Once a creditor search is conducted, a probate judge will grant the summary administration order. This order enables the distribution of assets directly to the beneficiaries listed in the will without going through the formal probate process. This process is usually much shorter and less time-consuming than formal probate. 

Gifts 

Gifts are no longer part of your estate, which means they won’t go through probate once you pass away. You can gift assets to family members, organizations, or individuals. By gifting assets, you also lower the value of your estate, which may reduce the time and cost of probate. Keep in mind that if you give more than $18,000 in a single year, you will be required to pay a gift tax. When gifting from your estate, you’ll also want to utilize an estate planning attorney to avoid tax implications and Medicaid eligibility.

Create an Estate Plan That Avoids Probate with Every & Stack 

Our Daytona Beach estate planning attorneys will help you develop a comprehensive estate plan that allows you to distribute your assets to your family and friends while avoiding probate. With some pre-planning and several estate planning tools, you can set up your estate so your possessions and property are easily transferred to your loved ones. Call our office at 386-255-1925 to get started drafting your estate plan. 

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