People who have achieved financial stability or professional success often want to share their good fortune with others. One of the ways they accomplish that goal is through transferring their wealth to specific beneficiaries after they die.
Those with valuable resources often need to create thorough estate plans to ensure that the right people receive resources from their estate. In many cases, individuals with valuable personal holdings may aspire to bypass probate court. They may worry about creditor claims diminishing the value of their resources or about estate taxes significantly diminishing what they transfer to their loved ones after their passing. There are a variety of different tactics that people can utilize to bypass probate court with specific assets.
How can people keep resources out of probate court?
1. Transfer-on-death paperwork
Financially stable individuals often have well-funded bank accounts. They may also have investment accounts and retirement accounts.
People can keep the contents of their financial accounts out of probate court by filing transfer-on-death or payable-on-death designations with their financial institutions. They nominate a specific beneficiary who can take direct control over the account after their death.
2. Trusts
Those with particularly sizable holdings or businesses in their names may want to consider starting trusts. The assets transferred to a trust belong to the trust, not the testator establishing the estate plan.
Particularly in cases where testators do not want their beneficiaries to squander an inheritance or to sell assets, like a family business, a trust can be an excellent tool to integrate into a broader estate plan. The assets owned by the trust typically do not become part of the estate and do not have to pass through probate court.
3. The addition of co-owners
Businesses, real property and other valuable assets can have more than one owner. Jointly-owned assets do not necessarily have to pass through probate court. It is often possible to arrange for a deceased owner’s interest to pass directly to a co-owner with the right planning.
Identifying valuable assets and outlining personal legacy goals can help those with valuable resources establish viable estate plans. Those who plan ahead of time can often limit which assets pass through probate court after they die.