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After the passing of a loved one, a critical task of surviving family members is to settle the estate. This task can be cumbersome and difficult, especially if an estate plan was not in place before the loved one’s passing.
If a loved one’s estate plan included a trust or other legal designation, then probate most likely won’t be necessary. If a trust is not in place or assets aren’t covered in the trust, then the estate may need to go through probate.
The Purpose of Probate
Probate is necessary to legally distribute the assets of a person who has passed. If there was a will in place a judge will determine if the will is valid and was not authorized under duress during the probate proceedings. If the person who passed did not have a will or other type of estate plan, then a judge will rule that the person died intestate and assign assets to be distributed according to intestacy laws. If the person who passed had verbally communicated or shared their wishes with others but did not have a legally binding document stating those wishes, then a judge will still rule that the individual died intestate.
Avoiding Probate
With the right plan in place, probate can be avoided.
Trusts
A trust is one of the most common ways probate can be avoided. With a trust in place, you are giving someone else (known as a trustee) the authority to manage your estate and assets that will benefit others (beneficiaries) upon your passing.
There are multiple types of trusts including:
- Asset protection trust
- Charitable trusts
- Irrevocable trust
- Living trust
- Pet trust
- Revocable trust
- Special needs trust
Joint Ownership
If you and another individual have joint assets, the other individual would most likely receive that property upon your passing. In both Nevada and Washington, joint tenancy is recognized. This is when two people, whether they’re married or not, have equal ownership of a property such as vehicles, bank accounts, real estate, or other valuable assets. If one of the joint tenants passes then any joint property will automatically be transferred solely to the other joint tenant without the need for probate.
Payable on Death Designation
Individuals who have a bank account may want to consider a payable on death (POD) designation so that a loved one can avoid probate in the future. With a POD in place, you are telling the bank where you would like any bank accounts (including checking accounts, savings accounts, or certificates of deposit) to be transferred upon your passing. The beneficiary would not have access to any of these funds until after you pass and there is no minimum amount required to secure this designation.
Transfer on Death Forms
Nevada and Washington both recognize transfer on death (TOD) forms. This designation allows individuals to specify that certain assets such as real estate, securities, and vehicles be transferred to a beneficiary upon your passing. TOD forms are not valid and can not be enacted until your death. The benefit of a TOD form is that changes such as the type of asset or who is the beneficiary can be made at any time prior to your passing.
Benefits of Avoiding Probate
There are two main advantages for avoiding probate — time and money. The probate process can take several months, if not more than a year, depending on any disagreements regarding the distribution of assets. Additionally, court fees and other financial obligations to finalize the estate can be extremely costly.
Help Your Loved Ones Avoid Probate
With the right plan in place now, you can do everything in your power to help loved ones avoid probate. The team at Jerimy Kirschner & Associates, PLLC has worked with countless individuals and couples preparing their estate plans so that their loved ones can avoid probate and focus on remembering their legacies.
Start your free estate planning consult by contacting us online or by phone — (206) 203-8802.