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For many people, maximizing their personal legacy is a top priority during estate planning. They want to leave as much as they possibly can for loved ones or specific charitable causes. Wealth preservation as part of the estate planning process requires appropriate strategies based on the testator’s circumstances.
One of the important tactics utilized in many cases involves bypassing probate court. The more property that people can keep out of probate proceedings, the more their beneficiaries may ultimately receive. Assets that become an individual’s estate must typically pass through probate court. Their value can lead to estate tax liability. Those assets could also be vulnerable to creditor claims.
Keeping property out of probate court is a smart move for those hoping to preserve as much of their property for loved ones as possible. What are some ways to keep assets out of probate court?
1. Use assets to fund a trust
Typically, only the property that belongs directly to a testator becomes part of their estate. Resources previously transferred to a trust to fund the trust do not belong to that individual anymore.
The trust has ownership and control over those resources. Moving high-value assets including business holdings and real property to trust can be a way to keep those resources out of probate court and significantly reduce the overall value of an estate.
2. Add co-owners to major assets
Another way to prevent assets from becoming part of an estate is to share ownership of those assets with others. Taking on a joint tenant with rights of survivorship can allow that other person to assume ownership of a shared home after the other owner dies. Adding a spouse or child to the ownership paperwork of other valuable assets typically prevents those assets from becoming part of an estate and requiring the oversight of the probate court.
3. Arrange for automatic transfers
Many people do not want to add co-owners to their financial accounts, as those other parties could waste resources and leave the account holder vulnerable. It is possible to arrange for financial resources to bypass probate court without giving another person access to those accounts immediately.
Transfer on death paperwork filed with financial institutions can keep monetary resources out of probate court. The intended beneficiary named in the paperwork can present the financial institution with identification and a copy of the death certificate of the account holder to take possession of the account.
Reviewing personal assets and estate planning goals can help individuals find ways to preserve their wealth by keeping property out of probate court. When testators establish thorough plans addressing their most valuable assets, they may have better peace of mind knowing that their loved ones will be provided for after they are gone. Contact us online or call today for a free consultation with Pennington Law, PLLC.
