6 Ways to Protect Assets from Probate

How to Keep Your Assets Out of Probate Court

Probate can be a hassle and expensive, so it's understandable that you'd want to avoid it. Here are 6 ways to keep your assets out of probate court:

1. Create a Revocable Living Trust:

A trust is a legal entity that holds your assets for the benefit of your beneficiaries. You can set it up to manage your assets while you're alive and then distribute them according to your wishes after you pass away. This avoids probate because the trust owns the assets, not you individually.

2. Joint Ownership with Right of Survivorship:

When you own property jointly with someone else with rights of survivorship, upon your death, the ownership automatically transfers to the surviving owner. This bypasses probate because there's no change in ownership, just a surviving owner.

3. Beneficiary Designations:

Retirement accounts like IRAs and 401(k)s, and life insurance policies, allow you to name beneficiaries. These assets pass directly to the designated beneficiaries outside of probate.

4. Payable-on-Death (POD) and Transfer-on-Death (TOD) Accounts:

These are bank accounts or investment accounts with a designated beneficiary. When the account owner dies, the money automatically transfers to the beneficiary, avoiding probate.

5. Gifting Assets While Alive:

You can give away your assets during your lifetime. There may be tax implications depending on the value of the gifts, but they'll be out of your estate and won't go through probate.

6. Having Few Assets:

If your estate is under the minimum level, we can transfer assets without a formal probate. In 2024, if your assets are under $184,500, no probate is required.

It's important to note that these are general strategies, and estate planning can get complicated. Consulting with an estate planning attorney is always recommended to determine the best course of action for your specific situation.