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judge-with-gavelProbate, the court-associated process where your estate debts are paid, your estate is settled, and your assets are distributed to your heirs or beneficiaries, can be costly and lengthy. In addition, probate is a public process where you estate assets may be viewed by anyone.

It’s a good idea to keep as many assets out of probate as possible. Here are 5 ways to accomplish this:

1 – Set Up Your Financial Accounts to Transfer to Your Beneficiaries at Your Death.

Your bank, brokerage, retirement, and life insurance accounts can normally be set up to either “pay” or “transfer” to your selected beneficiaries on death. Assets which are transferred this way avoid the probate process completely.

2 – Establish Joint Real Property Ownership With Right of Survivorship Where It Makes Sense.

It often makes sense for married spouses to own real property jointly. Where the property will pass to the other spouse when a spouse dies, that “right of survivorship” will keep the transfer out of probate court. In North Carolina, both ownership as” joint tenancy with the right of survivorship” and “tenancy by the entirety” provide real property survivorship rights to married couples.

3 – Donate or Gift Away Property

Property that you gift away before your death does not go through probate court. In some circumstances, it may make sense to give away some assets to charity, or to selected beneficiaries, to get these funds out of your estate before you die. But if your estate is large enough, you should consult an attorney about the potential tax consequences of such gifts.

4 – Utilize the Small Estates Laws

If the size of a deceased person’s estate is small enough, North Carolina provides expedited procedures for settling the estate, greatly shortening and simplifying the probate process.

5 – Create a Revocable Living Trust, Where Appropriate

If your estate size is large enough, or for other reasons, it may make sense to establish a revocable living trust. Assets which are properly added to a trust normally escape the probate process after the death of the grantor. In addition, assets placed in trust typically stay private, away from the public eye.

REFERENCES:

James Salter, 5 Smart Estate-Planning Steps to Avoid Probate, Nerdwallet (Feb.10, 2016), https://www.nerdwallet.com/blog/finance/5-smart-estate-planning-steps-to-avoid-probate/.