Avoid Probate to Avoid Property Headaches

On June 6, 2011, in Probate, by Justin Velthoen
Avoid probate to avoid time-consuming, costly ownership hassles.

Avoid probate to avoid time-consuming, costly ownership hassles.

The natural assumption might be that probate court exists to settle ownership disputes following a property owner’s death. While it’s true that probate court does handle such cases, more often than not, probate is largely a clerical process. Nobody’s disputing property ownership, nobody’s arguing the interpretation of a will.

But it can be a pricey clerical process for the person assuming ownership, which is why it’s wise for property owners to take necessary – and sometimes simple – steps to avoid unnecessary probate proceedings. Here are a few preparatory measures property owners can take to negate the need to pay extensive fees later on.

What happens in probate?

Even in uncontested probate cases, the process can tie up property for months. And because the process involves a fair amount of paperwork and filing, probate can be expensive. Fees range from executor fees, attorneys fees, court costs, appraiser’s fees and other expenses.

Typically, the process involves:
• collecting all property that is subject to probate
• paying any debt, including claims against and taxes owed
• collecting any rights to income or dividends
• settling any disputes
• distributing the remaining property

How to avoid probate?

There are a number of measures that owners can take to help their heirs avoid probate. Establishing a revocable living trust removes property from being subject to probate, because trust property is technically owned by a trustee, not you as an individual. After your death, ownership can easily be transferred to a family member or friend.

There are also several forms of joint ownership that provide an easy way to avoid probate if one owner dies, such as joint tenancy with right of survivorship, tenancy by the entirety, and community property with right of survivorship.

Property owners are also free to give property as a gift while they’re alive. Owners should also check laws specific to the state in which they live. Most states offer simplified procedures through or around probate for small estate cases.

Justin Velthoen of Toucan Homes is a real estate professional. The content presented above should not be considered tax or legal advice, and is intended only to assist homeowners in finding general answers to their questions. Toucan Homes recommends that homeowners seek professional tax and legal advice from a licensed lawyer and/or CPA.

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