Tips for avoiding probate

Tips for avoiding probate

On Behalf of | Aug 19, 2020 | Estate Planning & Probate |

Some people in North Carolina who are creating an estate plan might want to avoid probate. In some cases, a combination of strategies may accomplish this.

For example, it might be possible to leave a home to another individual if both people are joint tenants with rights of survivorship. However, there are some drawbacks to this approach. A person in a second marriage might want a spouse to be able to continue living in the home after death but may want to home to pass to their children and not their spouse’s children. This arrangement would allow the spouse to pass the home to anyone desired, including a new spouse. There may also be tax implications in certain situations. Furthermore, if the other owner gets a divorce or gets involved in a lawsuit, that owner’s portion of the home could be seized.

Some assets do not pass by probate but instead pass by beneficiary designation. This is the case for retirement accounts, such as 401(k)s or IRAs, and life insurance policies. One of the most common ways to avoid probate is to create a revocable living trust. All assets must then be retitled and placed in the trust. A potential drawback to this approach is that any assets not in the trust on a person’s death must go through probate.

There are a few reasons people may want to avoid probate. They might want their estate plan to remain private, and probate is a public process. Avoiding probate also means that there is no will for disgruntled family members to challenge. Some people who use a revocable living trust to avoid probate also create what is known as a “pour-over will.” This document places all remaining assets in the trust at the time of the person’s death. An estate planning lawyer may help clients create this and other documents.