Beyond Bending Tell You How
Setting up a trust is an excellent way to ensure that your assets are protected and distributed according to your wishes after you pass away. However, if you have property that is not in a trust, it may be subject to probate. Probate is a legal process that takes place after someone dies to determine the validity of their will and distribute their assets according to their wishes or state laws.
Whether you have a will or not, the probate process can be time-consuming, expensive, and complicated. In this article, we will explore what happens to property not in a trust and how you can avoid probate.
What is Probate?
Probate is a legal process that takes place after someone dies. It involves proving the validity of the deceased person’s will, identifying their assets, paying off any debts or taxes, and distributing the remaining assets to their beneficiaries or heirs.
If someone dies without a will, their assets will be distributed according to state laws. The probate court will appoint an executor to oversee the process and ensure that everything is handled properly.
Probate can be a lengthy and expensive process, and it can tie up assets for months or even years. It can also be emotionally draining for the deceased person’s loved ones.
What Happens to Property Not in a Trust?
If you have property that is not in a trust, it will likely go through probate after you die. This includes assets such as bank accounts, real estate, investments, and personal property.
During probate, the court will determine the validity of your will (if you have one), identify your assets, and distribute them according to your wishes or state laws. This process can be time-consuming and expensive, and it can tie up your assets for months or even years.
Additionally, probate is a public process, which means that anyone can access information about your assets and how they are being distributed. This lack of privacy can be a concern for some people.
Real Estate
Real estate is one of the most significant assets that people own, and it can be subject to probate if it is not in a trust. If you own property in your name alone, it will likely go through probate after you die.
During probate, the court will determine the value of your property and ensure that any outstanding debts or taxes are paid. Then, the property will be distributed according to your wishes or state laws.
If you want to avoid probate for your real estate, you can transfer ownership of the property to a trust. This will ensure that the property is distributed according to your wishes without going through probate.
Bank Accounts
Bank accounts are another asset that can be subject to probate if they are not in a trust. If you have a bank account in your name alone, it will likely go through probate after you die.
During probate, the court will determine the value of your bank account and ensure that any outstanding debts or taxes are paid. Then, the remaining funds will be distributed according to your wishes or state laws.
If you want to avoid probate for your bank accounts, you can transfer ownership of the accounts to a trust. This will ensure that the funds are distributed according to your wishes without going through probate.
Investments
Investments such as stocks, bonds, and mutual funds can also be subject to probate if they are not in a trust. If you have investments in your name alone, they will likely go through probate after you die.
During probate, the court will determine the value of your investments and ensure that any outstanding debts or taxes are paid. Then, the investments will be distributed according to your wishes or state laws.
If you want to avoid probate for your investments, you can transfer ownership of them to a trust. This will ensure that they are distributed according to your wishes without going through probate.
Personal Property
Personal property such as jewelry, artwork, and furniture can also be subject to probate if it is not in a trust. If you have personal property in your name alone, it will likely go through probate after you die.
During probate, the court will determine the value of your personal property and ensure that it is distributed according to your wishes or state laws. This process can be time-consuming and expensive, and it can tie up your assets for months or even years.
If you want to avoid probate for your personal property, you can transfer ownership of it to a trust. This will ensure that it is distributed according to your wishes without going through probate.
How to Avoid Probate
If you want to avoid probate, there are several steps you can take. The most effective way to avoid probate is to create a trust. A trust is a legal arrangement that allows you to transfer ownership of your assets to a trustee who will manage them for the benefit of your beneficiaries.
When you create a trust, you can specify how you want your assets to be distributed after you die. This can help you avoid probate and ensure that your assets are distributed according to your wishes.
Another way to avoid probate is to own property jointly with another person. When you own property jointly, it will automatically pass to the surviving owner after one owner dies. This can help you avoid probate for that property.
You can also designate beneficiaries for your bank accounts, retirement accounts, and life insurance policies. When you designate beneficiaries, these assets will pass directly to your beneficiaries after you die, without going through probate.
Conclusion
Probate can be a time-consuming, expensive, and complicated process. If you have property that is not in a trust, it will likely go through probate after you die. This can tie up your assets for months or even years and can be emotionally draining for your loved ones.
To avoid probate, you can create a trust, own property jointly, or designate beneficiaries for your assets. These steps can help you ensure that your assets are distributed according to your wishes and avoid the probate process altogether.
