|Posted on April 25, 2014 at 3:20 PM|
As discussed in an earlier post (“What Is Probate”, April 13, 2014), a will has to be “probated” in order to have legal force and effect. But that aspect of “probate” is not onerous or costly. It is “probate” in the second meaning of that term–i.e, court supervision of the administration of an estate–that most people want to avoid. Besides creating a living trust to avoid “probate” (a court supervised estate administration), a formal, court supervised estate administration can also be avoided:
• By placing ownership of all property in joint ownership with right of survivorship or “tenancy by the entirety” (joint ownership with one’s spouse) or by creating “pay on death” or “transfer on death” accounts. These are very common and effective methods of transferring property to a surviving spouse, children, or other intended beneficiaries without opening an estate.
• By taking advantage of “unsupervised administration” provisions under Indiana law which allow a personal representative (formerly called an “executor”) to administer an estate without court supervision—which is practically identical to the way a successor trustee normally administers a living trust following the death of the grantor.
• By designating beneficiaries on life insurance policies, annuities, IRA’s, 401(k)’s, and other accounts which can pass by beneficiary designation on death outside of a will or trust.
• If the value of the individual’s “probate estate” at death is less than $50,000.00, property (including real estate) can be transferred by affidavit, and it may not be necessary to open an estate at all.
There are many tools in an estate planner’s “toolbox”. Consult with an estate planning attorney to consider the options available and to choose the tools that are right for you.