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Cortes Law Firm, Estate Planning, Probate, Trust Administration
Avoid Probate and Save Money
How do you avoid probate? Well, there’s probably several different options, and it really depends on what your situation is. I always talk to my clients about different buckets.
We have what’s called a non probate bucket.
We have our probate bucket and we have our revocable living trust centered estate plan bucket.
If you have a remarkable living trust, our trust, as you hear people say, the key to that is to put all of your assets into that bucket. In other words, all of your assets are titled in the name of your trust so that when you pass away your successor, trustee steps into your shoes and is able to distribute assets and pay debts without having to go through the probate process.
And depending on how complex your estate is, they may be able to complete this in a couple of months at very little expense compared to a probate.
The next bucket is while the probate bucket that means you did not do anything, and so your assets have to be distributed by a court of law through the probate process. If that’s the case, then it’s going to cost your estate thousands of dollars and probably four to six months to get the process done.
The other way to avoid probate is to be in that last bucket, which is the non probate assets. Now what goes into that non probate asset bucket? Well, it depends on what you put into it, just like it depends on what you put into your trust bucket.
If you have a bank account, for example, you could put a pay on death beneficiary on that bank account so that when you pass away, the bank automatically will pay whoever the designation is, whatever is in the account.
So if you die with $2,000 in your bank account, the bank will write a check for $2,000 to your pay on death beneficiary. You can also do the same thing with real estate in some jurisdictions. It’s called a transfer on death deed, so you could actually state when you pass away who you want your real estate to go to, but you have to make sure that that is up to date and you have it for all of your properties because if one of your properties is left out, then it will have to go through the probate process.
Retirement and Insurance Estate Planning
The other items are like insurance or retirement accounts where you specifically list a beneficiary. So when you pass away your retirement account or your insurance provider, your life insurance provider, they will look down and see who the beneficiaries are and they will write a check out to those beneficiaries without having to go through the probate process.
Now I need to caution you here because if you don’t list anybody as a beneficiary of your retirement account or maybe even your insurance account, then it’s going to have to go to your estate and will then need to be probated, so ways to avoid probate are one.
Make sure that you have stuff titled correctly in your revocable living trust or have stuff in that non probate bucket and have them titled so that there’s PAY on death and transfer on death designations and you have beneficiary designations as well. Whatever you do, make sure you speak with an estate planning attorney in your jurisdiction to make sure you do all of this correctly to avoid probate.
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Cortes Law Firm
5801 Broadway Extension Hwy Suite 110
Oklahoma City, OK, 73118
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