How to avoid probate (and those fees)
So you've read our blog and know what probate is. If not, read this post first. Now you want to know, how do I avoid probate in the first place.
The best way to avoid probate is to ensure none of your assets need to be probated in the first place. An ounce of prevention is worth a pound of cure.
How do I keep my assets out of probate court?
You only have to go through probate if you own real estate worth more than $50,000 or if you entire estate is worth more than $150,000. But here is where it gets a little tricky—what is in your estate? Everything you own is in your estate, unless you do certain things.
You can take real estate out of your estate, if you own it as a joint tenant with right of survivorship or community property with right of survivorship. You can also avoid probate by leaving everything to a surviving spouse.
But I'm not married! How do I avoid probate now?
If you are not married, you can still avoid probate by putting your property in a revocable trust. When your property is transferred to a revocable trust, it is no longer in your estate for probate purposes. As long as the property not in your trust is under the probate thresholds, you will successfully avoid probate.
Of course, revocable trusts can be helpful for married couples, too.
What about my life-insurance policies and retirement accounts?
If you designate a beneficiary, other than your estate, life insurance proceeds and retirement assets fall outside of your estate. But, if you don't keep your beneficiary designations up to date, the proceeds could inadvertently end up in your estate.
These are the main ways to avoid probate. Of course, avoiding probate is probably not the only goal you have. I recommend preparing your estate plan with a competent estate-planning attorney to ensure that all of your goals are accomplished.