Individuals creating estate plans may wish to consider the differences between leaving property to heirs through a will or a trust. As noted by Credit.com, a will typically goes through probate, which may reflect a time-consuming legal process. You may, however, prefer that a probate court judge oversees a legal and binding transfer of your assets to your named beneficiaries.
After your death, the personal representative named in your will submits it to the probate court. The representative may also settle your debts, but he or she may need to do so before any assets transfer to your heirs.
How may certain assets avoid probate court?
A will may not require outlining all the assets that you wish to leave to heirs. Financial accounts, for example, may allow you to add joint account owners or beneficiaries to receive your accounts’ funds when you die. You may not need to list jointly owned assets in your will.
If you have retirement accounts, you may add a beneficiary and also bypass probate. As described by the Florida Legislature’s website, executing joint ownership through a tenancy in common deed may allow an heir to take control of a real estate property without probate.
How may I transfer assets through a trust?
You may also consider a living trust, which allows you to add or remove assets while alive. If you own several properties, for example, you may include written instructions for a trustee to manage them. When you die, the trust may serve as a way to provide income to your named beneficiaries through the managed properties. Assets and properties contained in a trust generally do not require probate.
Probate transfers ownership of assets from the deceased to beneficiaries named in a will. Effective estate planning may, however, provide options for avoiding probate and providing heirs with access to an inheritance sooner.