There is one word beneficiaries of an estate are not especially fond of, however chances are, they may need to hear it. Unless the testator planned ahead, estate beneficiaries will likely have to go through the probate process. The probate process is is often known for being confusing and complicated, not to mention drawn-out. If a testator receives legal guidance while writing the estate, probate may be able to be side-stepped.
Methods of transferring assets
There are ways to transferring assets to avoid them being subject to probate. One way is converting them to payable-upon-death or transfer accounts. In this scenario, a beneficiary becomes the owner of the accounts upon the death of the testator. When it comes to real estate, joint ownership is a tool used to bypass probate. When one owner dies, the property passes directly to the other owner; however, the title must be in both owners names with right of survivorship.
Gifts and revocable living trusts
Another way to transfer assets outside of probate is a Revocable Living Trust. With the creation of a revocable living trust, the grantor specifies how to divide the property upon his or her death. One can cancel or modify this type of trust at any time. It’s important that all valuable assets be included in that trust in order for them to pass to the beneficiary upon the death of the grantor outside of the estate.
An additional avenue to avoid probate is gifting assets prior to death. Gifting assets means they no longer belong to the testator and don’t have to go through probate. The annual tax exclusion for a gift is currently $15,000.
Some North Carolina residents might find the probate process to be confusing and complex. However, an experienced attorney in estate planning law may be able to help point out certain details regarding probate that previously were not considered. Obtaining legal advice either before or during the estate planning process and during the probate process can lead to the best possible outcome for one’s unique situation.