Probate is a legal process that you should understand when you are making estate planning decisions. This is the legal process of estate administration, and in New York, it takes place under the supervision of the Surrogate’s Court.
If you die while you are still in direct personal possession of property, the property becomes probate property. It cannot be distributed to the heirs until the estate has been probated and closed by the court.
This would be the case if you were to use a last will to direct postmortem transfers of your personally held property.
There are certain types of property transfers that are not subject to the probate process, and it is also possible to intentionally implement probate avoidance strategies. In this post we will look at some of the ways that assets can be transferred outside of probate.
Insurance Policy Proceeds
When you take out an insurance policy on your life, you name a beneficiary. After your passing, the company would pay the beneficiary directly, and the court would not be involved.
Payable on Death Accounts
It is possible to open a payable on death account at a bank or brokerage. It is like any other personal account, but the difference is that you name a beneficiary. The beneficiary cannot touch the assets while you are living, but after you die, the beneficiary would assume ownership of resources in the account.
This transfer would not be subject to the probate process.
You can add a co-owner to your personally held property. This person would then become a joint tenant.
To explain by way of example, let’s say that you add your daughter to the title of your home. She would be a joint tenant, and she would own half of the home right away.
After you die, your daughter would become the sole owner of the home. The transfer of your portion of the property to your daughter would take place outside of probate.
Revocable Living Trusts
People who want to avoid probate often create revocable living trusts. If you establish a revocable living trust, you are called the grantor of the trust.
The trustee administers the trust, and the beneficiary receives distributions from the trust. While you are living, you can act as the trustee and the beneficiary.
You name successors to assume these roles after you die. After your passing, the successor trustee would be able to distribute assets to the successor beneficiary, and probate would not be a factor.
For more information, please contact the Law Offices of Kobrick & Moccia at (800)295-1917 to schedule a consultation appointment with one of our experienced elder law attorneys.
Latest posts by Saul Kobrick (see all)
- Will Robots Care for the Elderly In the Not Too Distant Future? - July 26, 2018
- Understanding How Social Security Works to Fund Your Retirement - July 24, 2018
- 6 Important Estate Planning Considerations – Part 6: Taxes - July 19, 2018