People who have concerns about their estates going through probate generally worry that their heirs will have to wait a while to receive their inheritance. You might also worry about the lack of privacy probate will afford your estate since wills become a part of the public record. Fortunately, alternatives to probate exist.
The key to avoiding probate is setting up a way for your heirs to receive assets from you in a manner that bypasses the need for a probate court to transfer ownership to them. By setting up an ownership transfer to your heirs in advance, you may avoid probate. Nerdwallet explains a few ways how you might establish ownership transfers.
Trusts
By creating a living trust, you set up a way to transfer money, property or some other possessions to your heirs without the need for probate. In setting up a trust, you transfer ownership of assets to the trust. You specify that your heirs will receive the assets upon your death or at a time of your choosing. You may also describe conditions for your heirs to receive their inheritance. A trustee will oversee the trust and will take charge of distributing the assets after you die.
Pay on death accounts
You might have an IRA or a retirement account that you want a child to inherit. With the help of a pay-on-death provision, you can instruct your account to pay out to your child after you die. All you need to do in most cases is to fill out a form designating whoever you want to receive the contents of your account. You might also be able to do this with your vehicle or a piece of land you own, though certain laws will no doubt apply.
Joint tenancy
Another way to transfer ownership is to set up a joint tenancy arrangement where you and another person share ownership of property. Many married couples already have joint tenancy over their homes. You can also have joint tenancy over a bank account. When you die, the surviving owner receives full ownership without the need to go through probate.
