Creating an estate plan is an invaluable gift you give to yourself and to the people you love. Another gift you can give to your loved ones is the gift of probate avoidance. Structuring your estate plan such that most or all gifts bypass or avoid probate ensures that the intended beneficiaries will receive those gifts shortly after your passing instead of having to wait until the termination of the probate process. To help you better understand, a Murfreesboro estate planning attorney at Bennett | Michael | Hornsby explains what you can do to help your estate avoid probate in Tennessee.
Understanding the Probate Process
Probate is the name given to the legal process of administering the estate of an individual who recently passed away. Probate serves several important functions, starting with authenticating the decedent’s Last Will and Testament if one was left behind. Probate also ensures that a decedent’s estate assets are properly identified and valued, that creditors are notified and provided an opportunity to file claims against the estate, and that assets remaining at the end of probate are legally transferred to the intended beneficiaries or legal heirs.
What Are the Benefits of Avoiding Probate?
Probate avoidance is one of the most popular secondary estate planning goals because of the numerous benefits to avoiding probate. One of the most important, and practical, benefits to avoiding probate is that your designated beneficiaries will receive their inheritances much sooner. Formal probate is a time-consuming process that can hold up the distribution of much needed or long-awaited estate assets. When assets are wrapped up in probate, the Executor is usually required to wait until the conclusion of the probate process to transfer those assets. In Tennessee, creditors have 12 months to file claims against an estate then those claims must be reviewed and approved claims paid. Consequently, even a relatively simple estate can take over a year to get through the probate process. If the estate become embroiled in litigation, it may take noticeably longer to reach the end of the probate process.
The other important advantage to avoiding probate can be found in the cost of probate, which can be excessive and diminishes the value of the estate that is eventually passed down. There are typically expenses involved in securing, maintaining, and valuing estate assets. In addition, everyone involved in the probate of an estate is entitled to a fee, including the Executor, accountants, appraisers, and attorneys. Generally, the longer it takes for an estate to get through probate, the greater the expenses.
Ways to Help Your Estate Avoid Probate in Tennessee
While it may not be realistic to expect your estate to avoid probate altogether, you can likely decrease your estate’s need to undergo formal probate by incorporating some common probate avoidance tools and strategies into your estate plan, such as:
- Make a trust your primary distribution vehicle. Assets gifted through your Last Will and Testament must go through probate whereas assets included in a trust bypass probate. As such, establishing a trust and using that trust to distribute the majority of your estate assets can be a great way for your estate to avoid probate.
- Gift while you are alive. Only assets owned by you at the time of your death go through probate. By gifting assets prior to your death, you not only decrease the value of your probate estate, but you can also watch the beneficiary as he/she enjoys the gift.
- Include beneficiary designations on accounts. Certain types of accounts allow you to designate a “payable on death” beneficiary who will automatically become the account owner upon your death without the need for the assets to be part of probate. Unlike joint ownership, the beneficiary has no ownership rights in the asset while you are alive.
- Title property jointly. Real property titled jointly with rights of survivorship will bypass probate because your interest in the property will automatically be transferred to the surviving owner(s) upon your death.
- Be aware of small estate alternatives. Like many states, Tennessee offers a small estate alternative to formal probate for estates that qualify. If your estate includes only personal property valued at less than $50,000 the estate may be eligible to use a small estate affidavit in lieu of forma probate.
Contact a Murfreesboro Estate Planning Attorney
If you have additional questions or concerns about how to avoid probate in Tennessee, consult with an experienced Murfreesboro estate planning attorney at Bennett | Michael | Hornsby as soon as possible. Contact the team today by calling 615-898-1560 to schedule your free appointment.
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