Probate is the process of locating your assets after you die and distributing them to your heirs. Even when the process is fairly straightforward, e.g., when you have a will, it can take a long time and cost your heirs a lot of money.
The amount of hassle that probate imposes on your loved ones depends on the level of estate planning that you completed prior to death. If you die with no estate plan in place, probate can be very complicated and take a long time to sort out. However, if you are willing to take more extensive steps in your estate planning to change the ownership of your assets, it may be possible to avoid probate altogether.
1. Joint ownership
If you want someone specific to take possession of a particular asset after you die, you can make him or her a joint owner. When you die, the other person becomes the sole owner and retains control of the property, bypassing the probate process altogether.
2. Living trust
A living trust is one that allows you to keep control over the property until your death. Then it becomes the responsibility of a trustee who distributes the assets to your beneficiaries according to the instructions that you provided when you set up the trust.
3. Payable upon death
This is an option that does not allow your designated beneficiary to access your bank account while you are still alive but transfers the assets to him or her directly when you eventually die.
4. Transfer on death
This option is not available for all types of assets. You cannot transfer vehicles or real estate on death, but you can transfer stocks and bonds. Rather than going through probate, your beneficiary works with the company holding the assets.