When you are making any type of important financial decision, you are going to do your research. This should extend to your estate planning efforts. You should understand all of your options with regard to asset transfer vehicles, and you should understand the advantages and disadvantages that go along with each of them.
If you die with a Will or with no estate plan at all, the property that is in your personal possession may become probate property unless certain circumstances exist. Our firm practices in North Carolina. In the state of North Carolina, there are a couple of probate shortcuts which exist for small estates.
Collection by Affidavit
It may be possible to claim property through the execution of an affidavit if the value of the personal property that comprises the probate estate is $20,000 or less. This figure would increase to $30,000 if the surviving spouse is the only heir to the estate.
If all of the probate property is going to the surviving spouse, a summary probate process may also be available.
If the above circumstances do not exist, the legal process of probate will be a factor, unless you employ probate avoidance strategies when you are planning your estate.
Avoiding Probate
There are a number of different ways that you can arrange for direct asset transfers to your heirs outside of the process of probate. Probate can be time consuming and costly, and it is a public proceeding that strips your loved ones of privacy. These are the primary reasons why probate is often avoided by people who understand the details.
Revocable Trusts
One very popular probate avoidance tool is the Revocable Trust. When you create this type of trust, you can act as the beneficiary and the trustee while you are still alive and of sound mind. You do not surrender control of the assets, and this is certainly comforting to many.
The point is to arrange for the transfer of your assets after you die, so you also name a successor trustee and a successor beneficiary or beneficiaries. Once you pass away, the trustee will administer the trust according to your wishes as stated in the trust agreement.
The beneficiaries will ultimately receive their distributions in a direct and timely manner, and the process of probate will not enter the picture.
Estate Planning Consultation
In this post we have provided some basic information about probate and why people often avoid it. If you would like to gain in-depth information about probate, we can help.
Our firm offers estate planning consultations to people in and around Raleigh-Durham, North Carolina. To set up an appointment, give us a call at (919) 484-0012.