Although every person who creates an estate plan has a unique set of needs and objectives in mind, a common estate planning goal is probate avoidance. There are several reasons why avoiding probate is so desirable, including the desire to save both time and money as well as a wish to keep the details of your estate plan private. If probate avoidance is one of your estate planning goals, the Lincolnshire probate attorneys at Hedeker Law, Ltd. explain some common strategies to help you better understand how you can reach that goal.
What Is Probate and Why Might I Want to Avoid It?
When a person dies, he or she leaves behind an estate that consists of all the assets the individual owned or had an ownership interest in at the time of death. This includes both real and personal property as well as both tangible and intangible assets. Probate is the legal process that many of those assets must go through before eventually being transferred to the intended beneficiaries or legal heirs of the estate. Probate serves a number of different functions though, including:
- Authentication of the decedent’s Last Will and Testament (if one was left behind)
- Locating and notifying beneficiaries and/or legal heirs of the estate
- Identifying, valuing and eventually distributing estate assets
- Notifying creditors of the estate and allowing them to file claims against the estate
- Ensuring that state and federal taxes owed by the estate are paid
- Providing a legal forum for challenging the decedent’s Will
The most common reasons you may wish your own state to avoid the probate process include time, money, and privacy. Even the most simple estate will take a minimum of six months – and usually much longer — to get through the probate process. The reason for this is that the law requires an estate to remain open that long to allow creditors to file claims against the estate. Keep in mind that probate assets cannot be distributed to the intended beneficiaries until the conclusion of the probate process. Probate can also diminish the value of the estate you leave behind because of the expenses involved in probating an estate. Along with court costs and legal fees, everyone involved in the process is also entitled to a fee, such as the Executor, accountants, and appraisers. Finally, documents submitted to the probate court, including your Will, become public record, meaning anyone can learn the details of your estate and how you distributed that estate.
Common Probate Avoidance Strategies
If you decide that avoiding probate is a goal you wish to incorporate into your comprehensive estate plan, you will need tools and strategies in your plan aimed at helping you achieve that goal. The overall key to avoiding probate is reducing the probate estate you leave behind because not all assets are required to go through the probate process. With that in mind, the following are some of the most common strategies used to avoid probate:
- Establishing a trust. Assets held in a trust bypass probate. By creating a trust, you can transfer most probate assets into the trust and effectively turn them into non-probate assets. A trust can help with a number of other estate planning benefits as well, such as incapacity planning.
- Title property jointly with rights of survivorship. Your interest in your house, for example, could transfer directly to a spouse or adult child after your death if titled properly.
- Change the designation on financial accounts to “payable on death (POD)” or “transfer on death (TOD).” Assets held in a financial account, when designated as POD, will automatically become the property of the designated beneficiary upon your death; however, the beneficiary has no legal rights to the assets while you are alive.
- Make use of life insurance. Life insurance proceeds are non-probate assets and, therefore, are paid out directly to the beneficiary after your death. Consider using them to fund a funeral trust which then pays for your funeral.
Contact Lincolnshire Probate Attorneys
Please download our FREE estate planning worksheet. If you have questions or concerns regarding the probate of an estate in the State of Illinois, contact the experienced probate attorneys at Hedeker Law, Ltd. by calling (847) 913-5415 to schedule an appointment.