How to Protect Your Assets From Probate


Probate is the legal procedure, supervised by a court, for managing and distributing property after you die. Probate is intended to ensure that your property is distributed according your wishes, but the proceeding can be expensive and time consuming. You can protect your assets from probate with effective estate planning. Use strategies like establishing a trust or putting your assets in accounts with a named beneficiary to make it easy for your family and friends to take possession of the assets you want them to have.

  • Determine whether your estate will qualify as a small estate. Most states offer methods for avoiding probate when the value of an estate's assets falls within specified limits. In some states the inheritor may claim assets simply by providing a signed document, called an affidavit. Your state's laws may provide simplified probate procedures for small estates that allow your beneficiaries to settle the estate quickly and without the assistance of an attorney. Check your state's laws to see if your estate will qualify for these options.

  • Consider distributing some of your assets during your lifetime by making gifts. You may make gifts to your spouse, a charity, a political organization or direct payments of tuition or medical expenses for anyone without incurring any tax liability. As of May 2011, the Internal Revenue Service also allows you to give up to $13,000 a year to as many individuals as you choose without incurring a tax liability.

  • Convert property that you own as an individual to joint ownership. Property held in joint tenancy does not require probate procedures. When one of the joint owners dies, the remaining owner takes title to the property without any court proceeding. Married couples in community property states may identify assets as community property with the right of survivorship. The surviving spouse owns the property following the death of her spouse. Other states allow couples to own property as a tenancy by the entirety, which works the same way.

  • Set up "payment on death" accounts, which are not subject to probate, by naming a beneficiary on your bank accounts and retirement accounts. Your beneficiary claims the asset following your death by providing proper identification. If your state allows "transfer on death registration," register your intent to transfer property like securities or vehicles outside of the probate process by signing a statement that identifies the beneficiary.

  • Consider establishing a revocable trust. Name yourself as the trustee to retain control of the property during your lifetime. Identify a reliable individual or institution to take over as trustee when you die. In the trust document, include your directions for transferring the trust property to your family and friends following your death. The trustee owns and controls the property, so probate is not required.

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