For many testators in Minnesota, avoiding probate court is one of their primary planning goals. After all, when estates must pass through probate court, the cost of estate administration increases substantially.
Probate proceedings can take months to complete, which means that the beneficiaries of your estate won’t receive property until then. Additionally, paying both for time in court and a lawyer’s representation can consume a significant portion of the resources in your estate.
Both the contents of your estate, like real property, and its overall value can influence whether or not probate is necessary. If your goals for estate planning include keeping some of your property or the majority of your estate out of probate court, there are multiple tactics that may help you achieve that goal.
1. Make strategic gifts
Those with large estates may have thousands of dollars in assets and personal property to leave to their family members. Instead of waiting for people to receive that property after you’re gone, you could start sharing it with them now.
Annual gifts of both property or money can enrich the lives of the people you love and allow you to witness their enjoyment of their inheritance. Many years of gifts to multiple people can also reduce what your estate is worth and keep much of your property out of probate court.
2. Arrange for transfers when you die
Some kinds of property can automatically transfer to your loved ones after your death. Financial accounts, including investment accounts, typically give the option for individuals to execute a transfer on death document.
Such forms will allow someone with a copy of your death certificate to become the primary account holder without going through probate court. You could also execute a deed ahead of time to allow for the transfer of real property when you die.
3. Move property into a trust
Assets held in a trust will not be part of your estate because they do not technically belong to you but rather to the trust. Using a trust to bypass probate court for large assets like real estate and business holdings is a common tactic. Trusts can also help you qualify for state aid as you age and protect your assets from creditor claims later in life.
Careful estate planning is a key step for those who would like to minimize probate oversight of their estates after they die.