We all want to leave something behind for our loved ones. Nobody wants to give the government a big chunk of their hard-earned money in probate fees. We also don’t want our loved ones to wait months, even years, to get a penny from our property.
It’s much easier than you think to avoid probate delays and costs. Here are some probate tips to make sure your Denver estate is in the hands of the people who matter.
How Does Probate Work?
Probate is the process of distributing a person’s property after death by a court (often a probate court). The court appoints someone to make sure all debts are paid and the remaining property is transferred. In the absence of a will, the state’s probate law controls property distribution.
Probate costs include filing fees, newspaper publication fees, and attorney fees. An average probate proceeding lasts about six months to two years. Probate makes the deceased’s finances public, from the nature and value of assets to debts, and to who gets what. Making any necessary changes to the ownership of property is the key to avoiding probate. Taxes are also a factor.
5 Ways to Avoid Probate
You can avoid probate with one or more of these methods. Depending on your situation, you’ll need to choose a method or combination of methods.
#1: Give Away Your Denver Property
Transferring property before you die is one way to avoid probate. You can’t give everything away because you’ll need some of it to live. However, you might want to do away with some luxuries, like a bigger home or a car that you won’t drive anymore.
If you’re selling a home, consider selling it to a professional home buyer in Denver. This is the best option when you’re in a hurry to move. All they have to do is get information about your home and make you a cash offer.
#2: Make a Living Trust
Making living trusts, which are simply alternatives to wills, is the easiest way to avoid probate. A living trust places your assets and property “in trust,” which are then managed by a trustee for the benefit of your beneficiaries. This lets you avoid probate because the property and assets are already in the trust.
#3: Make Sure Your Retirement and Bank Accounts Have Beneficiaries
Most people don’t know that we can name beneficiaries on many of our most valuable assets. It’s possible you didn’t realize that the bank account you opened when you got your first job lets you name a beneficiary.
To get started, just fill out the payable on death forms that your brokerage company or bank can provide. Some of these accounts will automatically be partially owned by your spouse if you’re married. Filling out these forms, however, ensures that the proceeds are disbursed at death instead of having to go through probate, saving a lot of time and money.
#4: Hold Joint Property
If you and your spouse or significant other are planning to buy a first home or already own one, owning jointly lets the house pass automatically to your significant other without probate. It doesn’t matter if you’re married. If the property is a jointly held property, it goes to the surviving spouse.
#5: Make a Will
While a will doesn’t avoid probate, it’s an important part of minimizing its costs. It’s possible to avoid probate for much of one’s property, especially items of high value, but it’s hard to keep all property out of probate. It’s a good idea to have a will for things that can’t be kept out of probate.
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