Probate is a court-supervised process meant to administer a deceased person’s estate. In Nevada, strict court oversight is in place to make sure the designated probate procedure and policy are followed. Whether or not a will exists, probate is required, as long as the deceased has enough assets that require administered. Certain assets do not go through the probate process. They include assets in a jointly owned account as the surviving account owner gets the assets.
Probate can take time to complete and is hard and costly. If you are making an estate plan, consider if probate can be avoided in your situation. If so, you should learn how to get started. A skilled Top Nevada Probate Lawyer can help you navigate probate rules, estate planning, and probate administration with ease. Assets such as solely owned properties, personal possessions not designated to certain beneficiaries, and individual bank accounts usually go through the probate process.
Steps Involved in Probate
Probate validates your will and makes sure your assets are divided based on your wishes after you die. It includes the following steps:
- Will validation. Probate confirms that you created a legally valid will that reflects your final wishes.
- Asset inventory. The probate process includes cataloging your estate assets.
- Debt settlement. Probate also includes paying all outstanding debts and taxes.
- Asset distribution. This step is taken to allocate the remaining assets of an estate to the designated beneficiaries.
How Probate Affects Your Estate and Beneficiaries
Completing the probate process can take many months to years. Legal fees, taxes, and court costs can decrease your estate’s value. Also, the legal process makes matters about your estate a public record. You can mitigate such effects by avoiding probate through different estate planning strategies. When assets don’t go through probate, they are distributed more privately.
How to Avoid Probate
To avoid probate, below are strategies you can follow:
- Creating a living trust. When you transfer assets into a trust, you retain control over them during your lifetime. When you pass away, these assets are divided among your beneficiaries without going through probate. Your living trust can be revocable or irrevocable.
- Gifting assets before you die. This strategy can decrease the size of your estate, possibly avoiding probate altogether. But your gift should be limited to up to $17, 000 every person every year without incurring gift tax. This lets you transfer assets to your heirs while reducing your taxable estate.
- Holding assets in joint accounts. Joint asset ownership makes sure the assets pass to the surviving owner without probate after the other owner dies. Every kind of joint ownership has implications. Kinds of joint ownership include joint tenancy with Right of Survivorship, community property, and tenancy by the entirety. Joint ownership can help make sure that assets are transferred smoothly, but it can result in complications when the two owners have disagreements, go through divorce, or deal with debt.
- Designating payable-on-death (POD) accounts and transfer-on-death (TOD) accounts. Assets in such accounts bypass probate. PD accounts for assets such as bank accounts let you name a certain beneficiary who will get the funds when you die. Meanwhile, TOD designations are applicable to real estate and investment accounts, making sure such assets are directly transferred to beneficiaries without going through the probate process.
Important Things to Keep in Mind
Remember that not all assets go through probate. For example, retirement accounts that have designated beneficiaries, life insurance policies, and trust assets can avoid probate. Also, having a will does not mean your asset will avoid probate. Rather, your will dictates the distribution of your assets based on your wishes with the probate court still supervising the distribution.