By Attorney Rebecca S. Spinner
When someone dies in Massachusetts, anything that person owned individually will need to be probated. Probate is the court process by which the deceased person’s assets are transferred to the individuals who will inherit them. Probate takes at least a year and can be very costly depending on the number of heirs involved and the types of assets you leave behind. Most of the time, probate can be avoided altogether by doing certain things while you’re alive.
- Naming Beneficiaries
Most bank accounts, retirement accounts, insurance policies, and other assets that you own can avoid probate if you name a beneficiary. This is the person who would receive your assets after you’ve passed. Any account that has a beneficiary, transfer-on-death designation, or payable-on-death designation will avoid probate and pass directly to your beneficiary when you pass. In order to make these designations, you can contact each financial institution and fill out their required forms.
You can also avoid probate by setting up a Trust plan. This could be an irrevocable trust or revocable living trust, depending on your personal needs and goals. If properly funded, a Trust can avoid probate on almost all of your assets. Trusts are privately administered, so no notice needs to be given like in the probate process, and your assets pass directly to the beneficiaries you’ve named. Trusts can also provide a multitude of other benefits, such as asset protection, estate tax minimization, money management for beneficiaries, and more!
- Joint Ownership
Another way to avoid probate is by naming a joint owner on your property. You can use this strategy to avoid probate on everything from bank accounts to vehicles to real estate. There are some draw backs to this method, as you may be opening yourself up to the attachment by the creditors of the joint owner (e.g. divorce, law suits, creditors, etc.). So before changing ownership, consult an Estate Planning attorney to find out whether this strategy is the best for your situation.
There are many different strategies that we can use to help you and your loved ones avoid the headache and cost of the probate process. If you want to learn more, please reach out to our team to book your free consultation today.