Whether you have experienced first-hand how cumbersome the probate process can be, or you have simply been warned about it, you may now be determined to keep your estate’s exposure to probate to a minimum. To help you better understand how your estate can reach your probate avoidance goal, the probate lawyers at the Law Offices of Kobrick & Moccia discuss the purpose of probate and how careful estate planning can significantly contribute to your probate avoidance goal.
What Is Probate and Why Is Avoiding Probate Desirable?
Most people leave behind an estate when they die. That estate consists of all assets owned by the decedent at the time of death, including real and personal property as well as intangible and tangible assets. Probate serves several important purposes, including:
- Identifying, locating, securing, and valuing all assets owned by you at the time of your death.
- Notifying creditors and offering them the ability to file claims against your estate.
- Authenticating your Last Will and Testament
- Litigating any challenges to your Will
- Identifying and notifying beneficiaries and/or heirs of the estate
- Ensuring that federal (and in sometimes state) gift and estate taxes are paid if owed
- Effectuating the transfer or the remaining estate assets to the new owners
Probate avoidance is among the most popular of all estate planning goals in large part because formal probate is costly, both in terms of time and money. In the State of New York, it will take at least eight months to probate even a relatively simple estate because creditors have seven months from the date the Surrogate Court issues letters to file a claim against the estate. Often, formal probate can take considerably longer than eight months. In addition, the longer it takes to probate an estate, the more expensive it will likely be because everyone involved (Executor, attorney, appraiser, accountant) is entitled to a fee for their services. The good news is that careful estate planning can minimize, if not completely avoid, your estate’s exposure to probate.
Estate Planning Tips for Avoiding Probate
Working with an experienced probate lawyer is the best way to achieve your probate avoidance goal. There are, however, some common strategies and/or tools that you may wish to incorporate into your overall estate plan to help your estate avoid probate, such as:
- Using a revocable living trust as your primary method by which your estate assets are distributed. Not all assets are required to go through probate. Assets held by a trust, for example, bypass the probate process altogether and can be distributed to beneficiaries as soon after your death as you wish. Using a trust to distribute assets offers other benefits as well, such as the ability to stagger an inheritance instead of leaving a lump sum to a young beneficiary.
- Titling assets and accounts so that they pass to the new owner outside of probate. The manner in which assets are titled can also be used to avoid probate. Real property, for example, can be held jointly with rights of survivorship, allowing your interest in the property to pass directly to the co-owner upon your death without first going through probate. Certain accounts can also be designated as “Payable on Death (POD)” or “Transfer on Death (TOD)” accounts which allows you to designate a beneficiary who will automatically become the owner of the assets held in the account upon your death. Unlike jointly held assets, however, a beneficiary of a POD or TOD account has no ownership interest in the asset while you are alive.
- Gifting while you are alive. Only assets owned by you at the time of your death are relevant for probate purposes. Making lifetime gifts diminishes the value of the estate you leave behind, thereby increasing the likelihood that your estate can avoid probate. Lifetime gifting can also offer other benefits, such as tax avoidance, if gifts are carefully planned.
Contact New York Probate Lawyers
Please feel free to download our FREE estate planning worksheet. If you have questions or concerns about how your estate plan can help your estate avoid probate, contact the New York probate lawyers at the Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.
- Do I Need a “Durable” Power of Attorney? - April 2, 2020
- Joint Tenancy Pros and Cons - March 31, 2020
- Planning for the Sandwich Generation - March 26, 2020
