Contrary to what you may think, it is not that difficult to avoid probate in Fayetteville. There are some simple ways to make sure your property passes to the heirs you choose without going through probate. Some of these methods include Revocable Living Trusts, Payable-on-Death Accounts and Registrations, Joint Ownership of Property and Gifts. It is best to consult with a licensed Fayetteville estate planning attorney to explore which options are best for you.
Revocable Living Trust
Living trusts are estate planning instruments that were created to allow people to get around probate. A trust document is very similar to a will. However, trusts provide the advantage of holding valuable property in a trust which, after your death, does not become part of your probate estate. It is still considered part of your estate for federal estate tax purposes, however. The trust property is not considered part of your estate because a trustee actually owns the property instead of you. Yet, you still determine how the property will be distributed. Upon your death, the trustee is then able to quickly and easily transfer the trust property to your intended heirs without going through probate.
Payable-on-Death Accounts and Registrations
Another option is converting your bank and retirement accounts into payable-on-death accounts. This is simply done by completing a form listing a beneficiary of those accounts. So, when you die, the money is transferred directly to your named beneficiary without going through the probate process.
The same process applies to security and vehicle registrations in some states, including Arkansas. Arkansas also allows transfer-on-death real estate deeds called beneficiary deeds. These instruments essentially allow you to transfer real property by listing a beneficiary in the deed document itself. The beneficiary provision does not take effect until your death, but the property does not need to go through probate.
Joint Ownership of Property
Joint ownership is another way to easily avoid probate. When one owner dies, the surviving joint owner retains ownership of the property without going through probate. There are different types of joint ownership that can accomplish this. Joint Tenancy with Right of Survivorship allows the property to transfer to the surviving joint owner automatically upon the death of the other owner.
Arkansas also recognizes what is known as Tenancy by the Entirety. In Arkansas, married couples take title not in joint tenancy, but in “tenancy by the entirety.”. This type of ownership is very similar to joint tenancy, but is only available to married couples. The spouses basically own property together as a single legal entity.
Giving gifts of property while you are still living is another way to avoid probate. If you don’t own the property when you pass away, the property does not go through probate. Consequently, the cost of probate is less, since the expense of probate is correlated to the value of the assets passing through probate. Also, most gifts are not subject to federal gift tax. For questions regarding any of these issues, contact an experienced estate planning attorney.