If you die without a will, the court will decide how to distribute your assets among your heirs.
This process will take place in one or more state probate courts, depending on where your assets are located, and it will be based on state laws.
This can be expensive, and your estate may have to shoulder court costs and pay for any legal advice your heirs may require. Is this what you want?
Probably not. Your estate represents a significant amount of work, and it is natural for you to want to leave as much as you can to your heirs, as efficiently as possible.
One way to do so is to avoid probate court altogether. How? To avoid probate, increase the number of items in your estate that are transferred without a probate procedure. Here are three ways to achieve that.
1. Register assets as “joint tenants with rights of survivorship” or “transfer on death.” You can specify that many of your assets, such as securities and brokerage accounts, be set up as “transfer on death”. Similarly, other assets (such as properties) can be titled as “joint tenants with rights of survivorship.” Upon your death, these assets will bypass probate court and go directly to whomever you specify.
2. Ensure retirement accounts have a designated beneficiary. Many retirement accounts (such as IRAs and 401(k) plans) and insurance products allow you to name who should receive the assets when you die. These assets are excluded from your probate estate and transferred directly to your heirs.
3. Place assets in a revocable living trust. A revocable living trust is a legal entity that has the power to hold legal title to assets. Assets in revocable trusts provide for a direct transfer of assets to your beneficiaries.
Feel free to reach out to us if you need guidance with this process.