When someone sets out to create an estate plan there are many things that person is likely taking into consideration. In many cases the main objective of the person drafting the estate plan is to make things easier for loved ones after they are gone. This objective can be accomplished by more than just providing for them financially.
For example, decisions made in the course of creating the estate plan can actually make the time following the death of the creator of that plan easier. One way this could b e accomplished is by keeping probate fees to a minimum. In this post we will explore several ways in which this may be accomplished.
The first is to use trusts. Trusts minimize probate fees because their use actually avoids probate completely. The assets held in a trust will be addressed by applying the terms of the trust rather than the probate process.
Next, creating more than one will could minimize probate fees. The idea behind this approach is that one will would address assets that are subject to probate and the other would not. If done correctly, the two wills would be handled separately and only the one addressing assets subject to probate would go through the probate process.
Designating beneficiaries on certain plans and policies can also work to avoid probate. These plans and polices include:
- Registered retirement savings plans
- Registered retirement incomes funds
- Life insurance policies
When beneficiaries are named the assets pass directly to those individuals and do not have to go through the probate process.
Giving assets away prior to death also reduces the fees tied to the probate process since there are fewer assets that must be addressed in this manner. In some situations owning assets in joint tenancy can also be a good method.
To ensure that these approaches work as intended it is important that the estate plan is written correctly. An estate planning lawyer is often the best way to do this.