As readers of this blog likely know by now, probate should be avoided. It is time-consuming and very expensive because it is, essentially, death litigation. Plus, the entire legal battle is public, which can make the family squabbles that explode during probate much worse. It is no wonder why many people want to avoid it, but can we avoid it here in Massachusetts?
Create a living trust
Yes. In Massachusetts, it is possible to avoid probate, and one way to do it is through a living trust. With a living trust, you transfer your assets into the trust now, while you are alive, for the benefit of your beneficiaries after you die. And, while you are alive, you can appoint yourself as the trustee to retain full control over your assets, and appoint whoever you want as your successor trustee, who will take over the trust’s management after your death or incapacity.
After you pass, all of the trusts funds that pass to your beneficiaries do so without the need to go through probate. This is possible because none of the trust’s assets are actually in your name, which means they are not part of your estate. Plus, the living trust provides you privacy, flexibility and some creditor protection.
A living trust does not have to go through probate because it is not part of your estate. The successor trustee can distribute the assets to the beneficiaries according to the terms of the trust without court supervision. A living trust can also provide privacy, flexibility, and protection from creditors.
Name a beneficiary on your assets
Another way to ensure your family avoids probate after you pass is by naming your beneficiaries on your assets now. You can do this on many types of assets now without giving up control. You do this by designating a person or entity who will inherit your asset on death. Many accounts of this designee ability, including bank and retirement accounts, life insurance policies, annuities and stocks and bonds.
Giving gifts
Of course, you can give some of your assets to your friends and family now. But, be sure to look up the gift tax rules and exemptions.
Creating a life estate
Another option is creating a life estate for your real property. With a life estate, you retain the right to use the property for your lifetime, but ownership transfers automatically to another person upon your death.