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How Can I Avoid Probate?

If your estate is subject to probate, you run the risk of incurring steep legal costs and delaying the distribution of your assets to your heirs. Avoiding probate is crucial in this case, and there are a few methods you can utilize during estate planning that will allow you to do just that. The Balance has more information on how you can arrange your estate so that probate is no longer a concern.

When it comes to retirement accounts or life insurance policies, beneficiary designations allow you to disseminate the proceeds of your accounts to your heirs after you die. There are other times when you can use beneficiary designations, including on bank accounts and even real estate. In Illinois, you can implement a life estate deed (which allows ownership of property until your death). This process is not subject to probate court, which will cut both costs as well as time.

Creating a revocable living trust is another method of sidestepping probate. Assets must be funded to the trust in order for it to take effect, which in essence means the trust will own your assets. After you die, a trustee will be responsible for providing heirs their allotted assets as you see fit, without the need for a messy probate hearing.

You can also set up joint ownership of assets like bank accounts or real estate. Be cautious when using this step, as you may be subject to gift taxes. You also run the risk of losing assets of the joint owner dies before you do. In this case, their estate may claim half or even all of the property, which could be devastating for your heirs. The same can occur if a joint owner is sued, as your assets could be considered part of their estate.