The probate process is the legal proceeding in which a deceased person’s estate is administered and settled.
Probate is necessary if a person dies and has assets in their name only.
It is likely that the person’s estate will have to be probated before the heirs or beneficiaries of the estate can assume ownership of those assets. Probate can be time consuming and expensive in certain cases, but there are ways to avoid it if your estate is properly planned.
Here are a few ways to avoid probate:
1) Name a beneficiary on accounts.
If you have bank, retirement, or other financial accounts, place a beneficiary on the account so that when you pass away, your account will pass to the designated beneficiary. Most of the time this is called a “payable on death” (POD) designation. Naming a beneficiary in this way pulls the asset outside of probate and it passes as a matter of law. Speak to your bank or financial institution about adding a POD designation to your account.
2) List your spouse and yourself as “tenants by the entirety.”
If you are married and own property make sure that any property you own is in both you and your spouse’s name as tenants by the entirety. The tenants by the entirety designation means that you each own 100% of the property together as a married couple with a right of survivorship. In other words, when the first spouse passes away, the second spouse automatically inherits the entire property as a matter of law without the need for probate. Our office can help you with preparing any deeds, transferring ownership of property to both spouses’ names. 3) Utilize gifting.
Another action you can take to ensure that assets are not included in your probate estate is to utilize gifting. At present, the Federal Gift Tax allows up to $14,000.00 per year to be gifted to an individual without being taxed. A person who has a large estate may want to make significant gifts in their lifetime to reduce their taxable estate. Others may desire to limit the assets going into probate or to simply gain enjoyment from watching the beneficiary of the gift enjoy the use of the gift.
If you have more questions concerning probate or other legal issues surrounding estate planning, contact Batson Nolan. Call our office today for more information about planned gifting and the Federal Gift Tax exemption. At Batson Nolan , an experienced probate attorney will be able to address any of your estate planning questions for Clarksville, Montgomery County, Springfield, and other areas of Tennessee and Kentucky.