Four Strategies for Avoiding Probate in Gwinnett County
At some point in your life, you may have heard about someone’s estate being tied up in probate. It may have included awful stories involving relatives fighting over money or property to the point where family bonds were forever broken. The reality is that probate isn’t always a grueling and emotional process. In fact, a lot of the process boils down to paperwork, signatures, deadlines, and months, or sometimes years, of waiting. However, it’s still a process that some people would prefer to avoid because of the costs involved and the time it takes. Estate planning attorneys in Gwinnett County sometimes advise using the following options to help people in our area avoid the probate process altogether, or in part, so as to save time, money, and aggravation. Know that not all of these strategies are appropriate for every person and every situation, and these strategies may not be appropriate for you.
Create a Trust
Assets held in a trust do not have to through the process of probate in Gwinnett County. Instead, whoever you choose to manage your trust when you pass away will be able to distribute the assets in the trust privately and without being at the mercy of the probate court. Creating a trust is really the “gold standard” option for avoiding probate, but it’s important to make sure that your assets are properly titled in the name of the trust. If not, they will go through the probate process as though the trust did not exist in the first place. While a trust is a good mechanism for avoiding probate, the probate process in Georgia is not bad, generally speaking, and trusts are not necessary for every person or family simply to avoid the probate process. Having said that, there may be reasons beyond avoiding probate that make a trust a good idea for you or your family, including additional privacy and more robust incapacitation planning, among other things. The best way to determine if a trust is appropriate is to consult with an experienced estate planning attorney.
Important tip: if you elect to use a trust, it is critical to ensure that it is properly funded and assets are actually moved into the trust. Too often, someone will create a trust and then never fund it. That trust is therefore essentially useless and its terms will not be followed, as it has no assets in it to control.
Joint Ownership With Rights of Survivorship
If your estate plan includes property, having a co-owner can help avoid having the asset tied up in probate if the property is owned as joint tenants with rights of survivorship. This is often abbreviated as JTWROS. As long as it’s properly documented, ownership of the property would go to the surviving co-owner immediately if the other co-owner dies. For individuals who are not married, joint tenancy with right of survivorship can help you avoid probate for those jointly held assets; however, we do advise serious caution when considering this option with close friends, siblings, or other relatives as there can be some significant negative ramifications that must be fully considered.
In addition to real property, certain financial accounts, for example checking, savings and non-retirement investment accounts, can also generally be held as joint tenants with right of survivorship.
Important point: adding your child or children to your accounts or property as joint tenants with right of survivorship is not an estate plan. And, there are some good reasons against this approach. For example, it may have gift tax implications, your children take the assets at your cost basis instead of getting a step up in basis for taxes if they instead inherited it at your death, and critically, your assets now may be subject to the claims of your child’s creditors.
In some situations, transferring the ownership of assets while you’re still alive will help your loved ones avoid probate after you’re gone with respect to those assets. Giving away assets keeps it from being subjected to probate because it would no longer be considered your property. Just be sure to consult with your estate planning attorney to determine whether or not the property would be subject to a gift tax or if gifting could have serious repercussions when it comes to applying for certain benefits with “look-back periods” like Medicaid or Veteran’s Aid and Attendance.
When it comes to certain investment accounts and bank accounts, avoiding probate in Gwinnett County can be done by converting them to payable-on-death (POD) accounts. This process is often as simple as filling out a form and choosing a beneficiary. Upon your death, these accounts would then be transferred to your named beneficiaries without those assets having to go through probate.
Important point: Doing this in and of itself is not an estate plan. And, passing on assets in this manner may not accomplish your ultimate planning goals. This may be appropriate for some people with certain types of assets, but POD planning should be coordinated as part of your overall estate plan to ensure your wishes will be implemented.
If you’re concerned about your loved ones having to deal with the process of going through probate, an estate planning attorney can review your assets and your property ownership then advise you on your best options for each. If you’d like guidance in getting started, contact our Gwinnett County estate planning law firm to discuss your situation.
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