Learning how to avoid probate can make things a lot easier on your family once you pass. The process of probate can be very time-consuming and costly if you allow your entire estate to go through it. Here are a few ways that you can successfully avoid probate.

Payable on Death Accounts

Many of your financial accounts will go through probate if you do not take the necessary precautions ahead of time. For example, a regular bank account is going to have to go through probate unless you change it into a payable on death account. Once you convert your bank account into a payable on death account, you will be able to name a specific beneficiary that you want the funds to go to if you die. If you have a retirement account such as a 401(k) or IRA, you will be able to designate a beneficiary. Life insurance policies also allow you to designate a beneficiary as a standard feature. Make sure that you are to name beneficiaries on these types of accounts as soon as possible so that you can keep them from going into probate.

Joint Ownership

Another good way to avoid probate is to own property jointly with another individual. For example, if you own a piece of real estate jointly with your spouse, it will simply be transferred to them whenever you die. One of the most common methods of owning property is joint tenancy, with right of survivorship. This means that the ownership will automatically be transferred to the last surviving member of the couple. Tenancy by the entirety is a very similar arrangement, however it can only be used by married couples. The court looks at the ownership of this type of property as if it is owned by a single entity. Some states also use a method of ownership called community property. As long as you purchased the property after the marriage, you will both have an equal ownership in it.

Trust

One of the best ways to avoid probate is to set up a trust during your estate planning. With a trust, you will be able to transfer assets and will not have to go through probate when you die. You are essentially going to be giving your assets to a trustee to take care of for a certain amount time. You will be able to specify when you want the assets in the trust transferred to your beneficiaries. The trustee in this situation has a lot of responsibility. They will then make the necessary arrangements to transfer ownership of your assets to your designated beneficiaries when you pass away. With a trust arrangement, you should also be able to access the assets while you are alive. If you set up an irrevocable living trust, you can also get around paying estate taxes, if you have a large estate.

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