Building a plan to transfer your assets to those you love takes time and attention, especially if you anticipate family conflicts around the process. Unfortunately, transferring property within a family can lead to major disputes, draining away resources while the parties argue. If you have concerns about maintaining peace in your family after you pass away, now is the time to look at some tools you may use to transfer your property and avoid probate.
If you pass away and still possess your property legally, it will probably pass through probate. Probate is the process the courts use to distribute your property after you pass away, but there are ways to avoid it, at least partially. Probate may take more than a year to complete, which may cause significant tensions among beneficiaries. By distributing your property in other ways, your beneficiaries may not have to wait to receive their portion and there is less room for dispute.
Joint property ownership and revocable living trusts
If you already know how you want to divide your property, it may be a good idea to distribute those assets now instead of later. Depending on the type of property you transfer, you may want to assign joint property ownership or use a revokable living trust.
Assigning joint ownership means that you and your beneficiary jointly own a piece of property, which passes directly to the other party when you pass away. While this is not practical or possible with all types of property, couples may use this tool to protect their home or other significant assets.
Likewise, a revokable living trust allows you to put property in someone else’s ownership, while leaving you the right to revoke their ownership while you are still alive. If you pass away, the other party typically retains ownership and the property does not need to pass through probate.
Well-planned gifts bless both the giver and the receiver. The law allows you to give individuals property up to a certain value each year, without incurring any taxes. If you give a piece of property away, then it will not pass through probate because you no longer own it. It is wise to plan out your giving carefully to make the most of this opportunity.
As you consider your legal options, it is important to consider the circumstances and individuals that are most likely to lead to conflict. If you already understand these dynamics, a strong legal strategy can help you transfer your property effectively and efficiently while avoiding unnecessary conflict and protecting your legacy. Create your transfer plan today, to alleviate your concerns and to care for the ones you love.