As much as we Californians don’t like to think about our own death, we have to — for the sake of those whom we love.
Think about it. If you don’t leave a will or a trust, your granddaughter might not have access to the funds you promised her for college tuition. Do you really want your son and daughter not to inherit their childhood home? That could happen without proper planning.
If, in your lifetime, you don’t make estate plans, your death could bring about a long resolution when it comes to distributing your assets. It’s called probate.
Since there are costs involved with the probate process, the longer it goes on, the less your heirs will receive. In the end, the probate court might not make the decisions you would have made.
So, by working with an attorney well-versed in drafting estate plans, you can avoid probate and all of the issues it could bring.
There are four ways generally considered the best to pass on your assets and avoid probate. They are:
- Joint ownership of property. When you and another party – e.g., your spouse – buy property together, both of your names typically are listed on the deed as joint tenants with the right of survivorship (JTWROS). That means at the time of your death, the property passes on to the surviving owner.
- Death beneficiaries. Many types of assets, such as retirement accounts and payable-on-death accounts, transfer to a designated beneficiary when you die. Since they aren’t part of your estate upon your death, they are not an asset to be probated.
- Gifts. You can give your granddaughter that tuition money before your death, but be aware this takes some planning. There are annual and lifetime caps on gifts, so seeking advice before making any gifts is advisable.
- Revocable living trusts. This involves transferring your property to a trustee to manage it, but you can revoke the trust whenever you wish. By passing ownership of the property to the trustee, he or she then can transfer it to your beneficiary upon your death without it going through probate.
Estate planning is a serious topic with a long-ranging impacts. Most seek professional guidance to achieve the desired outcomes.