Avoiding Probate

by Charlotte Wood
(last updated February 21, 2009)

You can avoid anything in life except death and taxes; one of those things associated with death that you can avoid is probate. When you die, who wants to worry about having to pay taxes on what you've left behind or who wants to pay exorbitant fees to sort out the validity of a will? That is most definitely not something I'd like to do and fortunately there is a way to completely avoid that.

First of all what is probate? Probate is simply the verification of a will, but that can be time consuming and expensive, so if you can avoid it, do. There are a few ways with which you can avoid probate, some of which are more time consuming than others, but all worth looking into.

  1. You can declare a beneficiary as a pay-on-death arrangement. This works with your bank accounts best and all you have to do is go into your bank and ask for the form. You declare one specific person to be the owner of all your accounts—bank accounts, retirement funds, government bonds, and more—and all they have to do is bring in proof of the person's death and their identity.
  2. You can also have joint tenancy. Put simply, joint tenancy is more for married couples where on the death of one, all the assets automatically go to the other without dispute.
  3. You can also set up a living trust. This way you can transfer ownership of your property without losing control of it until you die (and seriously, what could you do with your property when you're dead anywhere). As soon as you die, the beneficiaries specified in the trust will immediately receive their portion without dispute.
  4. With life insurance, you have the ability to designate a specific beneficiary at the time of your death. This is also a great way to side step the legal problems associated with working out probate.
  5. You can also just give everything away. What you give isn't sorted through in your probate and it's a very direct way to divvy out your possessions without all the red tape. Giving away your assets can also help you out with your federal estate tax.

Dying unfortunately is more expensive than we think and if you can reduce the amount of money you have to spend when you die, then by all means do it! Avoiding probate isn't so hard and you (and your family) will be glad you did!

Author Bio

Charlotte Wood

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