When it comes to the topic of estate planning, there is inevitably one thing that grantors and beneficiaries will worry about: probate. This is the legal process of actually handling and executing the estate in court. That may sound safe and proper -- but it is also costly and time-consuming. It can leave beneficiaries with less than they desired and it can even cause personal divisions between family members.
This is why avoiding probate, or at least as much of it as you can, is the optimal outcome. What can you do as a grantor to minimize the effect of probate on your estate?
There are four important ways that you can protect your estate from the probate process. The first is joint property ownership agreements. These agreements enact a "right of survivorship" which passes the property on to the other owner if one of the owners dies. This means the property skips probate and simply immediately transfers to the other party.
Death beneficiaries is another option, and they function exactly like a "right of survivorship." A death beneficiary is designated by the holder of a financial account, and upon the owner's death, the beneficiary will assume control of the account.
Revocable living trusts are a great option for many grantor's too. These trusts shift the ownership of property or assets to a third party, who holds onto the property or assets for the benefit of another party. Depending on how the trust is drawn up, the ultimate beneficiary may receive the property or assets upon the grantor's death or over time.
Last but not least, the grantor could simply gift his or her property and assets to those that he or she wants before death.
Source: FindLaw, "Avoiding the Probate Process," Accessed Aug. 31, 2017