When a loved one passes away, their estate must go through probate. You may believe that if your loved one has a will, you can avoid probate, but that is not necessarily true.
Probate is the legal process of settling an estate. This includes validating the will, paying any debts, handling any tax issues and distributing assets to heirs. Without a will, assets are distributed according to Massachusetts probate laws.
Benefits of avoiding probate
Probate is generally a time-consuming process, and a costly one. Additionally, it increases the chance of family disputes over assets or the terms of a will.
However, there are some things you can do to reduce the number of assets that must go through probate or even avoid the process altogether.
Naming beneficiaries
Insurance policies, bank accounts and retirement accounts are examples of assets that allow you to name a beneficiary. The beneficiary receives the assets after the account or policyholder passes away.
Today, designating beneficiaries is typically a simple process. It can often be done online or by contacting the account institution and filling out a form.
Creating a trust
Setting up a trust can also help you avoid probate. Assets are placed into a trust and distributed directly to beneficiaries. Trusts also serve as a good way to minimize estate taxes and manage assets for beneficiaries.
Trust can be revocable or irrevocable. A revocable trust allows you to have control over the assets that go in and out of the trust during your lifetime. An irrevocable trust involves giving control of your assets to a trustee. Either one can be a good option, depending on the situation.
Joint ownership
Naming a joint owner on assets is another way to avoid probate. A joint owner can generally be named on almost any asset, including real estate, personal property and bank accounts.
There are many strategies Massachusetts residents can use to avoid probate, no matter their age or financial situation. These can save you and your family the stress and cost of probate.