When a loved one passes away, the last thing anyone wants to think about is the legal process that comes next. Unfortunately, for many families, this process involves probate – a lengthy and often complicated procedure that can add stress and expense to an already difficult time. However, the good news is that in some cases, probate can be avoided altogether.
1. Create a Living Trust
Creating a living trust is one of the most effective ways to avoid probate. A living trust is a legal document that allows you to transfer ownership of your assets into a trust while you're still alive. When you pass away, your assets are distributed according to your instructions in the trust document. Because the assets are held in trust rather than in your name, they don't have to go through probate.
2. Make Gifts While You're Alive
Another way to avoid probate is by making gifts of your property while you're still alive. You can give gifts up to a certain amount each year without triggering gift tax consequences (currently $15,000 per person). Giving away property before you pass away will leave less property in your estate when it's time for distribution.
3. Joint Ownership with Right of Survivorship
If you own property jointly with another person and have the right of survivorship, the property automatically passes to the survivor when one owner dies without going through probate. This arrangement is commonly used for real estate and bank accounts.
4. Name Beneficiaries on Your Accounts
Many financial institutions allow account holders to name beneficiaries who will receive the account funds upon their death. This includes retirement accounts like IRAs and 401(k)s and life insurance policies. By naming beneficiaries, these assets can bypass probate and go directly to the intended recipient.
5. Small Estate Procedures
In some states, there are simplified procedures for distributing small estates. If the value of your estate falls below a certain threshold (which varies by state), your heirs may be able to bypass probate entirely or use a simplified process that is less expensive and time-consuming.
Rapid City Estate Planning Attorneys
Planning your estate can be a complex process, but understanding the intricacies of probate and how to navigate them is crucial. At Beardsley, Jensen & Lee, located in the heart of Rapid City, SD, our team of experienced attorneys specializes in helping individuals and families with all aspects of estate planning, including probate avoidance. If you're looking to secure your legacy and ensure your assets are distributed according to your wishes, without unnecessary delay or expense, we invite you to contact us today at (605) 777-7466. Let us help you create a plan that's tailored to your unique circumstances and aligned with South Dakota's legal requirements.