You’ve worked hard for your assets, and it’s only right to ensure they’re protected even after you’re gone. One way to do that is by estate planning. However, estate planning is not just about creating a will. It involves a lot more, and one part of it is avoiding probate.
Probate is a legal process where the court oversees the distribution of an individual’s assets. The probate process can be time-consuming, expensive, and may even cause disputes among family members. In this article, we’ll provide essential tips to avoid probate and secure your estate with the help of an estate planning attorney in Knoxville TN.
Firstly, create a living trust. A living trust is an estate planning tool that allows you to transfer ownership of your assets to the trust, and you can name yourself as the trustee and beneficiary. Doing so avoids probate because your assets are no longer in your name, but the living trust’s name. Upon your death, your successor trustee will distribute your assets according to your wishes.
Secondly, designate beneficiaries. Designating beneficiaries avoids probate because you’re not leaving assets to your estate for distribution but directly to your beneficiaries. You can designate beneficiaries for your retirement accounts, life insurance policies, and bank accounts. It’s essential to review and update your designated beneficiaries regularly, especially after major life events such as marriages, divorces, or deaths.
Thirdly, gift your assets. Gifting your assets while you’re still alive can help avoid probate because the assets no longer belong to you. You can gift your assets to your beneficiaries or a trust, but it’s essential to know the gift tax rules before doing so. You can gift up to $15,000 per person per year without incurring the gift tax.
Fourthly, consider joint ownership. Joint ownership means owning property with someone else, and upon your death, the surviving owner automatically becomes the sole owner. Joint ownership can apply to real estate, bank accounts, and vehicles. However, it’s essential to know the pros and cons of joint ownership before deciding. For instance, if the joint owner has financial or legal problems, your assets may be at risk.
Fifthly, create a payable-on-death account. A payable-on-death account is a bank account that has a named beneficiary. Upon your death, the beneficiary can claim the account balance without going through probate. Payable-on-death accounts are simple to create, but it’s vital to choose a trustworthy beneficiary and to update your beneficiary regularly.
Lastly, consult an estate planning attorney in Knoxville TN. Estate planning can be complicated, and the laws vary from state to state. By consulting an estate planning attorney, you can ensure that your estate plan is legally sound and tailored to your specific needs. An estate planning attorney can help you create a living trust, designate beneficiaries, gift your assets, create joint ownership agreements, and create payable-on-death accounts.
In conclusion, avoiding probate is an essential part of estate planning. Creating a living trust, designating beneficiaries, gifting your assets, joint ownership, and creating payable-on-death accounts are some of the ways to avoid probate. However, it’s essential to consult an estate planning attorney to ensure that your estate plan is legally sound and tailored to your specific needs. An estate planning attorney in Knoxville TN can help you achieve a smooth and seamless transfer of your assets to your loved ones.