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Probate or Living Trust? Can Probate be Avoided?

Probate? The most estates go to probate. It doesn’t matter whether you have a will or skipped that important step in end-of-life planning. Either way, your heirs may need to go to court before your estate assets are disbursed.

The difference is that with a will, an executor you name will distribute assets according to your wishes. Without one, the court will designate an administrator who will divide your assets according to provisions of the law. You need a will or a living trust.

Avoiding probate. For those who want to avoid probate, there are several options to bypass the system. The first is to make heirs co-owners on bank accounts and other assets. In theory, this sounds good because heirs can simply remove the name of the deceased and then split the account balance without going to court. In reality, these setups can result in one heir legally running off with all the money. This can work if you only have one heir. But Beware.

Transfer on death provisions on deeds and accounts are another way people can avoid probate. The main risk with these provisions is someone dying out of order – such as a child preceding a parent. What’s more, if an asset is transferred to a minor, probate may have to be opened.

Rather than trying one of these options, One way to avoid probate is to set up a revocable trust(Living Trust) and transfer assets there. Upon death, the trust via successor trustee can then disburse assets to heirs without having to go to probate court first. This Living Trust is much more expensive than a will.

Probate litigation is the real problem. This is where family members sue in Probate Court because they don’t like the will or trust.

Don’t put your faith in a no-contest clause to the will. This language stipulates that anyone who legally challenges the will loses their bequest. This clause is easily sidestepped.

Communication from you may prevent family litigation from undoing all your hard work and your after death wishes. Tell the heirs what you want and why.

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