Some retirees in Florida have a very dismissive approach to estate planning. They decide that when they pass away, their heirs can tackle the paperwork and the details. They are content to live in the moment. However, there are others who prefer to plan ahead and ensure that as little of their assets as possible become public knowledge or get passed on to the government and taxes. These are the estate planners who prefer to avoid probate.
NerdWallet points out that the probate process is tedious and takes a long time. It may last anywhere from as long as three years to as short as three months. Rules vary state to state as well, which may become problematic when a person owns property in multiple states. It may also cost quite a bit of money. The larger the estate, the bigger the cost generally is.
The personal finance company offers five main tips to avoid probate:
- Use deeds or special forms to convert your personal accounts and IRAs into payable-on-death accounts.
- Use small estate laws and other provisions to potentially simplify the probate process.
- Establish joint ownership of property with preferred beneficiaries.
- Give away assets before passing.
- Set up a revocable living trust.
When people rely on trusts for estate planning, they may also have a spill-over or pour-over will to handle any assets not covered by the trust. MarketWatch reminds people to keep their will up to date to reflect any changes in assets or debts. This is important whether a person has established a trust or not. Some people argue it is even more important when there are no other documents created to detail the deceased’s preferences for asset distribution.