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3 Simple Ways to Avoid Probate Costs
My name is John P. Farrell and I’m an estate planning attorney here in Marietta, Georgia and I’m author of Estate Planning for the Modern Family. Estate Planning for the Modern Family is a step-by-step guide to protecting your estate for your loved ones, answers important estate planning questions for you and your family and much more !! If you live in Georgia, this book is a must-read.
But, what I want to talk to you about today is 3 simple ways to avoid probate costs. The bad news is that probated estates are subject to a variety of different costs and often these come from things like attorneys, executors, appraisers, sometimes you need accountants, and obviously the courts and a variety of situations depend on state law. A lot of it depends on the probate’s complexity, but fees can run anywhere from the thousands to tens of thousands of dollars. The good news is probate costs are often easily avoidable and they can be reduced just by avoiding probate in general.
What I want to talk to you about today is 3 simple ways to avoid probate costs by avoiding probate. The first thing you can do is name a beneficiary. The probate process determines who gets what when there is no beneficiary designation. So, naming a beneficiary is the easiest way to avoid probate.
There are common instruments that allow you to name a beneficiary and these include things like life insurance policies, annuities, and retirement plans. If you can name a beneficiary to one of your assets, it will typically avoid the probate process.
The second thing you can do is create and fund a Revocable Living Trust. A Revocable Living Trust owns your property, yet you remain in charge of all the legal decisions until your death. Once you pass away, your named Trustee manages your assets according to your instructions. This works well if it’s properly created and funded so you’ll want to speak with an experienced Marietta estate planning attorney about a Revocable Living Trust. That helps you with things that you can’t name a beneficiary to like real estate, certificates of deposit, things of that nature. The Revocable Living Trust is a second way to avoid probate costs.
The third way to avoid probate costs is to own property jointly. This is something you would want to speak with an experienced Marietta estate planning attorney about. But, probate can be avoided if the property is owned jointly with what we call Rights of Survivorship. There are different ways you can have joint ownership of property and Georgia doesn’t allow all of them.
As an example, joint tenancy with Rights of Survivorship is one of them. When you have it titled this way, ownership simply transfers to the other tenants upon your death and this is allowed in Georgia. Another way is tenancy by the entirety and this is a form of joint tenancy with Rights of Survivorship, but it’s only available for married couples and then in only some states.
For example, I happened to be licensed in Georgia and Tennessee (I’m also licensed in Texas). Georgia is not a state that allows tenancy by the entirety, but Tennessee does allow tenancy by the entirety. Again, it’s a form of joint tenancy with Rights of Survivorship and it’s only available for married couples and then only in some states.
Another form of joint ownership is with community property. This is property that is obtained during the marriage in some states and that becomes part of the community of the spouses. This is only allowed in some states and Georgia is not one of those states.
State laws play an important role here and we can help you determine which form of joint ownership is good for you if any of them are. But, if you are looking to avoid the probate process and simple ways to avoid probate costs, these are 3 simple ways to avoid probate costs.
- Name a beneficiary to the instruments you can name a beneficiary to.
- Create and fund a Revocable Living Trust. This gets it out of your name and into the Trust’s name and this will avoid the probate process for you.
- Own property jointly. Here in Georgia if you are married couple, the primary way is to do joint tenancy with Rights of Survivorship.
If you have any questions on how to avoid the probate process, feel free to reach out to us.