If you have a will or a trust, you may think that your estate planning is complete. However, there is another important aspect of estate planning that you should not overlook: avoiding probate.
Probate
Probate is the legal process of settling your estate after your death. It involves proving the validity of your will, paying your debts and taxes and distributing your assets to your heirs. Probate can be costly, time-consuming and public. It can also create conflicts among your family members and expose your estate to creditors’ claims. That is why it is a smart estate planning tactic to avoid probate in Massachusetts.
How to avoid probate in Massachusetts
There are several ways to avoid probate in Massachusetts, depending on the type and value of your assets. The first is transfer on death accounts. You can designate a beneficiary for your bank accounts, brokerage accounts, retirement accounts and other financial assets. The beneficiary will inherit the account directly upon your death, without going through probate.
Joint tenancy with right of survivorship
You can also own real estate or other property with another person as joint tenants with the right of survivorship. This means that when one owner dies, the other owner automatically inherits the property, without probate.
Life estate deeds
In addition, you can transfer your real estate to a beneficiary during your lifetime, but retain the right to live in the property until your death. This is called a life estate deed. The beneficiary will inherit the property without probate when you die.
Revocable living trusts
You can also create a revocable living trust and transfer your assets to the trust during your lifetime. You can name yourself as the trustee and beneficiary of the trust, and retain full control over the assets. You can also name a successor trustee and beneficiary who will take over the trust when you die. The trust assets will bypass probate and go directly to the successor beneficiary.
Voluntary administration
Finally, if you have no real estate and your estate is worth no more than $25,000 (minus the cost of a vehicle), you can use a simplified probate process called voluntary administration. This involves filing an affidavit with the probate court and notifying the heirs and creditors of the estate. The voluntary personal representative can then distribute the assets without further court supervision.