Can I skip probate without a trust?

When someone passes away, a court oversees the administration of their estate through a legal process called probate. This legal procedure can be lengthy, costly and public, which is why you would usually hear legal professionals advising you to avoid this by creating a trust. However, while trusts can be effective, other strategies can ensure your assets can reach your loved ones without getting tied up in court.

Here are some alternative ways to bypass this legal process:

Deeds for real estate

The real estate property you own usually goes through probate upon your passing. However, you can transfer real estate with special deeds that keep the property out of probate. These include:

• Joint tenancy with right of survivorship: Under this deed, the deceased co-owner’s share automatically transfers to the surviving co-owner.
• Tenancy by entirety: Exclusive for married couples, this deed grants each spouse an undivided 100% interest in the property, eliminating the need for a probate process.

Designating beneficiaries

Many financial accounts, like life insurance policies and bank accounts, allow you to name a specific beneficiary who will directly receive your assets upon your passing. Ensure you keep these designations up to date to reflect your current wishes.

Gifting during your lifetime

Gifting assets while you are still alive is an often overlooked way to avoid probate. Giving assets away to your heirs during your lifetime can significantly help reduce the size of your estate and some tax liabilities. Gifting also removes these assets from your estate, which means there is less to deal with during probate.

Given the many drawbacks of probate, it is understandable why many people would want to avoid this necessary legal process. Knowing alternative paths that will allow you to bypass it offers financial benefits and the peace of mind that your wealth will go directly to your family.