“Probate avoidance” is a term that you will hear often when you begin to do some research into the subject of estate planning. If you have no idea what probate is let alone why you would want to avoid it let’s start by providing a brief explanation. Probate is a legal process that takes place under the auspices of the probate or surrogate court.
The court is responsible for determining whether or not the last will that is presented is in fact valid. If it is, the probate court will supervise as the estate is administered by the personal representative or executor in accordance with the wishes of the deceased as stated in the last will.
When you hear the above you may come away wondering why anyone would want to avoid this process because it sounds rather harmless. One of the primary reasons why people employ probate avoidance strategies is because of the fact that they want their loved ones to receive their inheritances as quickly and painlessly as possible.
Probate can take a considerable amount of time to run its course. Even in simple, uncontested cases it is going to take months. The Anna Nicole Smith/E. Pierce Marshall battle raged on even after both parties passed away themselves, finally being resolved a few months ago after approximately 15 years.
There are a lot of different ways to get assets into the hands of your loved ones after your death outside of the process of probate. One of them is the utilization of pay on death accounts. You simply open up one of these accounts at a brokerage or bank and you name a beneficiary.
This beneficiary has no access to the funds while you’re still alive, and you can change the beneficiary if you want to or even close the account. At the time of your death, the beneficiary assumes ownership of the funds in the account directly and this transfer does not have to go through the process of probate.
To gain a deeper understanding of how pay on death accounts can fit into a comprehensive probate avoidance strategy, simply arrange for a consultation with an experienced, licensed estate planning attorney.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.