Welcome back! If you’re here, you probably already read the first part of our handy How to Avoid Probate series. In part 1, we discussed how to avoid probate using revocable living trusts and Pay-On-Death accounts and registrations.
In this, the second part of our guide, our New Jersey Estate Planning Attorney will take a quick look at two more ways to avoid the probate process. You are able to do that by jointly owning property or by giving gifts. We’ll go into more detail below, so keep reading and be enlightened!
Joint Ownership of Property
The truth is that using this method provides a quick and easy way to avoid probate altogether whenever the first owner passes away. Actually, there are several ways this can be accomplished. To take the title with someone else and avoid probate, all you have to do is a state, on the paper that shows your ownership (like a real estate deed, for instance), how you want to hold the title.
Generally, no other documents are needed, and when one of the owners dies, the property transfers to the joint owner, without ever getting probate involved. Neat, huh? There are a few ways to do this, so let’s quickly look at them below:
- Joint tenancy with the right of survivorship
Any property owned in joint tenancy will pass automatically to the surviving owner when one owner dies.
- Tenancy by the entirety
In a few states, married couples can often take a title not in joint tenancy, but in what is called “tenancy by the entirety.” It’s like joint tenancy, but in fact, only married couples may use it. In some states, even same-sex partners can do it, as long as they have registered with the state. Both ways work to avoid probate in exactly the same way.
- Community Property with right of survivorship
You can find another route to take if you live or own property in the following states: Alaska, Arizona, California, Idaho, Nevada, Texas, or Wisconsin. If you are married and co-own property with your spouse, you can use community property with the right of survivorship. This way, if one spouse passes, the other spouse automatically owns any assets upon death. If you’re in California and in a same-sex partnership, you can also do this as long as you’ve registered a domestic partnership with the state.
Avoid Probate through Gifting
Another way you can avoid probate is very easy and simple. You give all your stuff away! It’s true! Getting rid of all your possessions (or most of them) before you die is a way to avoid the process.
How? It’s simple: If you don’t own it when you die, it does have to go through the process! Doing this can lower probate costs because generally if there are assets with a higher monetary value going through probate, that makes the expenses higher as well. Plus, with most gifts, you don’t have to deal with federal gift taxes either, and not dealing with taxes is always a plus!
Stay Tuned for Part 3
That concludes part 2 of How to avoid Probate. In our next blog, we will take a look at how to avoid probate if you are a smaller estate. The New Jersey estate planning attorneys at Scott Counsel are here to answer your questions and provide the representation you need. Contact us today or give us a call to discuss your case. See you next time.