Probate is the legal court-supervised process that recognizes a deceased individual’s will, if any, and appoints a personal representative to administer the estate. The probate court ensures that a deceased individual’s assets are properly distributed to heirs of the deceased by the terms of the deceased’s will or intestate laws.
The reasons to avoid probate are because the probate process is generally expensive and time-consuming. The probate process can be difficult on your beneficiaries during an already difficult time.
Three strategies to avoid probate for real estate are as follows:
Lady Bird Deed – A lady bird deed is a type of deed that enables the owner of real estate to name a beneficiary on the deed. When the owner dies, the beneficiary named in the deed inherits the property automatically.
Joint tenancy with rights of survivorship – Joint tenancy with rights of survivorship is special language added to a deed that has more than one grantor. The multiple grantors are referred to as joint tenants. When a joint tenant dies, the rights of survivorship language causes that joint tenant’s interest to automatically pass to the survivor joint tenants. As an example, to create a joint tenancy with rights of survivorship, the deed would need to state: Cary Grant, a single man, and Robert Redford, a single man, as joint tenants with rights of survivorship. If Cary Grant were to pass away, then Robert Redford would automatically inherit Cary Grant’s share of the property.
Trusts – A trust is an estate planning document used to transfer assets to beneficiaries outside probate. For a trust to be effective at avoiding probate of real estate, the real estate needs to be deeded to the trust.
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