Did you know that only 34% of Americans have an estate plan? This means more than 60% of Americans die without even the most basic will.
If you lack an estate plan, your heirs will undergo a lengthy and costly probate process. Therefore, consider these strategies to reduce or prevent probate.
Share your property
One of the best ways to avoid probate is to list a secondary owner on your real estate, vehicles and financial assets. You need to add the rights of survivorship. In this case, the co-owner receives the property title automatically when you pass away. Although your property rights move to your surviving spouse, the co-owner will receive the title when your surviving spouse dies.
Create a revocable trust
Living trusts are separate entities where you can transfer your assets. You lose ownership, but you retain control of these assets when you transfer them into a trust. Then, when you die, your trustee automatically transfers these assets to your beneficiaries. You can update or revoke this trust at any time.
You can give $15,000 per individual and $30,000 per couple yearly. This is a great way to reduce your estate and the taxes your beneficiaries pay. However, real estate and financial assets may be worth more, so prepare your heirs for their tax responsibilities when you give large gifts.
Owning property in multiple states
It may surprise you that you can reduce probate requirements on your estate even if you own property in other states. Through gifting, proper titling of shared property and trust designations, your heirs automatically inherit this property without a probate requirement.
A proper estate plan can help your heirs avoid probate and help them create a future plan that protects their privacy and finances.