Most estates will pass through probate. This is a court-administered process supervising the execution of a deceased’s estate. It can take months, or in complex cases, years. During this time the beneficiaries will be unable to access the assets they are due to receive.
Some people’s estates are exempt from probate because their value is not high enough to meet the state’s minimum level where probate is mandatory. Other people, often (but not necessarily) those with much more valuable estates, take steps to get around the need for probate. One of those measures is to move assets into a trust, rather than pass them on via a will.
How does this work?
Once you move an asset into a trust you cease to be the official owner. As far as the law is concerned, the trust now owns that asset so it no longer forms part of your estate when you die and therefore will not be subject to probate.
Beneficiary designations also avoid probate
Another option is to move your money into assets that give you the option of designating a beneficiary. Upon your death, the company holding the asset will pay it out to the beneficiary you named when creating that asset. Or the beneficiary you updated the designation to favor.
Saving time and money can benefit everyone, no matter whether their estate is big or small. Learning more about the pros and cons of every option can help you decide whether you want to pursue one of these avenues or are happy to leave your estate to pass through probate.