Managing an estate may feel burdensome, especially if unprepared. Having a grasp on what does and does not go through probate, for example, may help create an estate plan.
Probate intends to ensure that the administrator follows the wishes of the deceased. However, this process may feel cumbersome and leave relatives in a bind if they depend on the loved one’s money.
What happens to the co-owned property?
If the deceased owns property with someone, whether tangible, such as real estate, or intangible, such as a bank account, it usually does not go through court. A jointly owned bank account is one of the quickest ways to pass money to loved ones because whatever is in the account remains in the survivor’s name. Property ownership is similar unless there is a contingency in the deed that the deceased’s share goes to heirs and carries into the will.
What does a trust do?
Setting up a trust serves a couple of purposes. It allows the grantor to take property out of his or her name, which provides a tax benefit. Anything put into the trust remains there until the conditions dictate. When the grantor dies, the contents of the trust do not go through probate since that property is not in the individual’s inventory but rather that of the trust. The same holds true for retirement accounts that have a beneficiary designation.
Setting up an estate plan with an eye toward probate may help pass property to heirs easier. Sharing the plan with the estate administrator may also make things run smoothly.