Most people dislike probate because of how lengthy and expensive it is. There are a few ways by which you can avoid probate. However, if you must go through the probate process, there are ways to lower the costs.
Along with paying for the probate process, you also need to pay the Executor for their services. Usually, the longer the probate is, the more money they get. To learn how to avoid probate, contact an attorney for estate planning.
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Tips to lower the costs of probate
1. Joint ownership.
When you jointly own assets with another person, these assets automatically move their estate once you pass away. This is known as the right of survivorship. Since these assets are immediately transferred into the other person’s estate, they no longer remain a part of your estate. Thus, they do not go through the probate process.
2. Transfer property to a trust.
Revocable living trusts are one of the best ways to avoid, shorten or lower the costs of probate. Unlike the property listed in your estate, the assets contained in a trust are not under your title. Since they are not actually owned by you but the trust, they do not go through probate. You can simply create a trust document and transfer the properties of your choice.
3. Leave a valid will.
A valid and well-planned will won’t save your family from probate, but it will provide a clear map of what the Executor should do. Often the will does not state things clearly, which is why it becomes subject to claims from family members and other relatives. The best way to avoid this is to hire an attorney to help you draft the perfect will.
4. Make tax-free gifts.
Instead of naming them as beneficiaries in your will, gift them the assets before you die to avoid lengthy probate. However, make sure these gifts are tax-free. You can give gifts worth upto $15,000 without tax implications. Giving away your assets before you die is a good way to lower the costs. This is because the higher the monetary value of the assets, the higher the probate costs.
5. Pay debts.
One of the jobs of the Executor is to pay back all the creditors and clear your debt before distributing the assets to the beneficiaries. If a person dies with a lot of debt to pay, then the process takes longer. You can save time and money both by keeping up-to-date with your bills and debts.