Sometimes estates take months or even over a year to go through probate. Some families fear that a court will take a long time to settle the estate of a loved one, plus they may have concerns about the cost of going through probate. For these reasons, some families seek other ways besides sending their estate through probate to pass on inheritances to their children.
The Motley Fool explains one way to transfer assets without involving probate is to set up a living trust. You as the grantor would set up the trust, filling it with assets you want to pass on to your family members or other beneficiaries. Living trusts avoid probate because you have transferred ownership of the assets to the trust, so after you pass away, those assets will not be a part of your estate and will not pass through probate.
Utilizing joint ownership provisions is another method to bypass probate. Under a joint ownership arrangement, you share ownership of an asset or an account with another owner. Usually, married couples already have joint ownership of their homes or their bank accounts. So when one spouse dies, the other spouse takes full possession of the asset. A joint tenancy with right of survivorship provision may also simplify the inheritance process by allowing a beneficiary to take ownership by filling out a form when the original owner passes away.
There are also accounts or assets that allow you to set up a payable on death arrangement. When you pass away, certain accounts will pay out to the person you want to receive them, or specific properties or assets will transfer over to your designated beneficiary. These transfers can take place without having to go through probate court. People may transfer bank accounts, retirement accounts, some investments, and occasionally real estate or vehicles in this manner.
FindLaw explains that another way to avoid probate is to give your assets to your intended beneficiaries as gifts before your death. While sometimes gifting assets can work out fine, the problem is that some gifts may have a high enough value to incur gift taxes. So generally, gifting an inheritance works when the value does not have a high value or the circumstances surrounding the giving of the asset are pretty simple.