Avoid These Mistakes to Keep Loved Ones Out of Probate

Avoid These Mistakes to Keep Loved Ones Out of Probate- Probate is a court-supervised process that authenticates a will, settles debts and distributes assets. While it serves a legal purpose, probate often comes with drawbacks, including court fees, delays that can span months or years, and the loss of privacy, as proceedings become a matter of public record. These factors make avoiding probate an appealing goal for many families.

Unfortunately, estate planning mistakes can result in your assets being subject to probate. However, with proper guidance, you can avoid these and other estate planning errors.

Not Using Beneficiary Designations

Many financial accounts, such as life insurance policies, retirement accounts and certain bank accounts, allow you to name beneficiaries. If left blank or outdated, these accounts may default to your estate, triggering probate. Regularly reviewing and updating beneficiary forms ensures that assets pass directly to the intended recipients without the need for court involvement.

Failing to Title Assets Correctly

Improper asset titling is another common misstep. For example, if you own property jointly with another person but the ownership type doesn’t include a right of survivorship, your share may still be subject to probate. Similarly, assets held solely in your name without a designated beneficiary are likely to be subject to the process.

Overlooking the Use of Trusts

A properly funded revocable living trust can be a powerful tool to bypass probate. However, many people create a trust but fail to transfer assets into it, leaving those assets vulnerable to probate proceedings. Funding the trust entirely and keeping it up to date are essential steps for making it effective.

Avoid These Mistakes to Keep Loved Ones Out of Probate

Ignoring Small, but Significant Assets

It’s easy to overlook small assets, such as a forgotten savings bond, an old vehicle, or even a digital account. However, if these are solely in your name, they may still require probate. A comprehensive inventory of all assets, regularly reviewed, helps avoid surprises.

Involving an Estate Planning Attorney

An experienced estate planning lawyer can identify gaps in your estate plan, help title assets correctly and ensure that all beneficiary designations align with your wishes. They can also advise on state-specific probate thresholds and strategies for keeping your estate out of court.

Thoughtful planning now can prevent costly and stressful legal entanglements later. Take the time to review your estate documents and asset ownership structure to protect your family’s future.

Key Takeaways

• Keep beneficiary designations updated: Prevent assets from defaulting to your estate and being subject to probate.
• Title assets correctly: Use joint ownership with survivorship rights or beneficiary designations where appropriate.
• Fully fund your trust: A trust is only effective if assets are properly transferred into it.
• Account for all assets: Even small or overlooked property can trigger probate.

Schedule your phone consultation: THE LAW OFFICES OF CLAUDE S. SMITH, III

Avoid These Mistakes to Keep Loved Ones Out of Probate

Reference: Forbes (April 1, 2023) “How to Ruin Your Kids With a Lousy Estate Plan”