Probate can be a costly and long process, sometimes taking years to conclude. The longer a person’s estate sits in probate, the more costs will rise. Because the high cost could leave heirs with less than the estate holder intended, most people try to keep cases out of probate whenever possible. There are four ways a Probate Lawyer in Bel Air MD can help a client keep assets out of probate, which will be discussed in the article below.
Joint Ownership of Property
Jointly owned assets with survivorship rights avoid probate for one reason: upon a person’s death, the property passes to the surviving owner. There are multiple ways to accomplish this, and the method chosen depends on state law.
* Joint tenancy with survivorship rights: Here, property is taken by joint tenants, and upon one tenant’s death, the asset passes to the other person.
* Tenancy by entirety: This form of ownership is available to married couples only. It functions in the same way as a joint tenancy, in that one spouse’s death causes the asset to pass to the other spouse.
* Community property: In areas with community property laws, married couples can hold assets with survivorship rights. It has an effect similar to tenancy by entirety, where a surviving spouse takes the assets.
Beneficiaries Upon Death
Many financial instruments allow owners to designate beneficiaries upon their death. Upon the owner’s death, the assets are excluded from the state and they pass directly to the named beneficiary. Below are some financial assets allowing such a designation.
* POD accounts: A named beneficiary inherits a POD (payable on death) account after the owner’s passing. These are simple to set up, and most banks only require the filling of a simple form. When the owner dies, the beneficiary goes to the bank, shows ID and claims the assets.
* Retirement accounts: These are a popular way to keep assets out of probate. When an IRA or a 401(k) is established, the owner can name whomever they wish as a beneficiary. However, spouses may have an automatic claim to part or all of the assets within.
Probate is an expensive process, and it can bring emotional turmoil at an already trying time.