One of the most common questions asked of estate planning attorneys relates to the avoidance of probate. Probate is the formal and often required legal process for administering your estate after you pass away. It can be time consuming, expensive and overwhelming for your heirs to navigate through.
If you have been through someone else’s probate in Michigan, you may be interested in trying to make the estate administration process easier for your loved ones. If a loved one never completed an estate plan, you may have had to either step in as an executor or wait a long time to receive assets intended for you, depending on what happened in probate.
By being proactive with your estate planning and communicating with an estate planning lawyer in advance, you can develop a plan for strategies that avoid probate entirely.
There are numerous ways to avoid the majority of your estate going through probate, including:
- Using beneficiary designations on life insurance policies, 401Ks, IRAs and any other retirement accounts with pretax contributions. This increases tax efficiency and is a straightforward technique.
- Develop a revocable living trust to transfer assets of different types to beneficiaries immediately and outside of probate.
- Joint ownership with the right of survivorship, which allows the surviving party to immediately take over control of the asset or account.
- Payable on death or transfer on death accounts may include checking, investment or savings accounts that give those heirs’ rights immediately.
- Making lifetime gifts which are currently set at a maximum of $17,000 per person per year without triggering any gift tax consequences.
Talk to a Michigan estate planning lawyer today to look at your various options for avoiding probate. This way you can create a full estate plan that addresses all of your assets and your needs.