Avoiding Probate: Steer Clear and Preserve Your Estate

As the probate process in New York and New Jersey can be both expensive and time-consuming, an increasing number of families are seeking ways to avoid it entirely. Probate involves the legal administration of a deceased person’s estate, either according to their will or the intestacy laws of New York/New Jersey in the absence of a will. We have previously explored the reasons why families prefer to bypass this public administration of their final affairs. Probate costs erode the value of your estate, all heirs-at-law have the right to inspect and challenge your will, and the lengthy proceedings cause delays in distributing assets to your beneficiaries. Fortunately, there are several effective strategies available to ensure that your estate is administered outside of probate.

Revocable Living Trusts

A Revocable Living Trust is one of the most versatile and popular estate planning tools available today. It functions as a container for your assets, allowing you to transfer assets into the trust during your lifetime and leave instructions for their distribution upon your death. Assets held within the trust are not subject to probate. The individuals you designate as trustees follow your instructions to transfer trust assets to your beneficiaries. A Living Trust provides you with a high level of control both during your lifetime and after your passing, facilitating a seamless transition during difficult times.

Joint Ownership

Adding a joint owner to an asset is perhaps the simplest way to transform it from a probate asset to a non-probate asset. When an asset is jointly owned by multiple individuals, it automatically passes to the surviving owner(s) upon the death of one of them. In New Jersey, married couples owning property “as husband and wife” enjoy the “right of survivorship,” meaning that the asset passes to the surviving spouse automatically and outside of probate. Adding another owner to your bank account grants that individual full ownership in the event of your death. Designating joint ownership on certain assets can have tax consequences, however, so it is important to consult a qualified estate planning attorney to assist you in making the right decisions for your family.

Direct Beneficiaries

Assets with direct beneficiary designations bypass probate. Life insurance policies, brokerage accounts, and retirement accounts are examples of assets that typically pass to beneficiaries through beneficiary designations. You can include transfer-on-death (T.O.D.) designations on bank and financial accounts, enabling them to pass to the designated beneficiaries without going through probate. These types of assets play a vital role in swiftly and directly transferring important funds to your loved ones. Regularly reviewing your beneficiary designations is crucial to ensure they align with your current wishes.

Take Action

Probate can be a protracted and costly process that adds stress and anxiety to the lives of your loved ones. However, with proper advanced planning, you can structure your assets in a way that eliminates the need for court involvement in your affairs. As every individual’s situation is unique, it is essential to consult with an experienced estate planning attorney to determine the most suitable strategies for your family. The attorneys at Choi Law Firm are here to guide you through this complex and occasionally overwhelming process, granting you power and control over what you have worked hard to secure.