The bad news: probated estates are subject to a variety of costs from attorneys, executors, appraisers, accountants, courts, and state law. Depending on the probate’s complexity, fees can run into tens of thousands of dollars.
The good news: probate costs can be reduced by avoiding probate. It’s really that simple.
Here are three simple ways to avoid probate costs by avoiding probate:
1. Name a Beneficiary. The probate process determines who gets what when there is no beneficiary designation. So, naming a beneficiary is the easiest way to avoid probate. Common beneficiary designation assets include:
- Life insurance
- Retirement plans
2. Own Property Jointly. Probate can be avoided if the property you own is held jointly with a right of survivorship. There are several ways that you can establish joint ownership of property such as:
- Joint tenancy with right of survivorship – ownership simply transfers to other tenants upon your death, this also subjects the property to the debts of the joint tenant;
- Tenancy by its entirety – is a form of joint tenancy with right of survivorship, but only for married couples in some states, and not available in South Dakota;
- Community property – property obtained during a marriage in some states, again this is not available in South Dakota;
- Life estates – but you give up some control and saddle yourself with obligations the person next in line;
- As you can see there are lots of factors to consider. We are here to help you manage these decisions.
3. Create and Fund a Revocable Living Trust. A revocable living trust owns your property, yet you remain in charge of all legal decisions until your death. You maintain control of your property while you are alive. After your death, your named trustee manages your assets – passing what you want passes, to whom you want it passed, according to your wishes. A trust works well but only if properly created and funded by an experienced estate planning attorney.
We Have the Tools to Help You
Contact our office today. We’ll help you decide whether it makes sense to avoid probate in your particular case and, if so, the best way to do so.