It is important to understand some things about probate when you are planning your estate. You may assume that a last will can facilitate immediate asset transfers after your passing, but this is not the case.
When you use a last will to state your final wishes regarding the distribution of your financial accounts and other property, the will must be admitted to probate. The heirs to the estate will not receive the probate property until after the estate has been probated and closed by the Surrogate’s Court.
Probate is a rather time-consuming process. In the simplest of cases it takes around nine months or so, and complicated cases can be held up in probate for multiple years. There are also expenses that accumulate during probate, and this is another one of the pitfalls.
Property Transfers Outside of Probate
Under certain circumstances, property can be transferred outside of probate. If you were to add a joint tenant to property that you own, the joint tenant would inherit the entirety of the property after your passing. Probate would not be a factor.
This can sound like a great solution, but there are certain drawbacks that go along with joint tenancy. The biggest drawback is the fact that you are immediately divesting yourself of half ownership of the property. The portion that is owned by the joint tenant could be targeted if he or she was to run into legal problems or financial difficulties.
Probate can also be avoided through the creation of payable on death accounts. You can open payable on death accounts at banks and brokerages. When you open this type of account, you choose a beneficiary. After you die, the beneficiary would inherit the assets in the account, and the transfer would not be subject to the probate process.
Simplified Probate Procedure
There is a simplified probate procedure in New York that may be available if the estate in question is rather small. A representative could apply for a simplified probate procedure if the probate assets do not exceed $30,000 in value and if there is no real estate involved.
Proactive Probate Avoidance
You can be proactive about avoiding probate when you are planning your estate. If you were to create a revocable living trust, the trustee that you name could distribute assets to the beneficiaries after your passing outside of probate.
These trusts are very popular among those who would like to facilitate timely and efficient asset transfers. However, there are other probate avoidance tools that may be preferable under certain circumstances.
Free Special Report on Probate
We have a valuable resource that is available to you free of charge if you would like to learn more about the probate process. Our firm has prepared an in-depth report on probate, and you can access your copy of the report through this website.
Click this link to get your copy: Rochester NY Probate Report.
- Donor Advised Funds: Too Good to Be True? - September 15, 2021
- Changing “Irrevocable” Trusts Through Judicial and Nonjudicial Modification - September 8, 2021
- Reasons to Supplement Your Estate Plan With Life Insurance - September 7, 2021