One important reason to go through the process of estate planning is to help make it as easy as possible for your loved ones after you pass away. In many cases, much of your estate will have to go through the probate process, which can be costly and time consuming. With a little bit of planning today, however, you can help minimize the overall probate costs so your loved ones can receive the most possible benefit from your assets.
The following are three of the most effective ways to reduce probate costs. Take a moment to read through them, and see if they apply to your situation. If so, make sure you take the necessary steps to update your estate to reflect these changes.
Joint Ownership – If there are any assets that you own jointly with someone else, such as a spouse, make sure they have right of survivorship whenever possible. This will allow those specific assets to be handed directly to the other party without having to go through the probate process at all. If you currently have any assets that could qualify as a joint asset, make sure you see if it makes sense to put the asset in both of your names.
Giving Assets Away – It may be possible to give away certain assets prior to your death. If you no longer own the assets, they will not be involved in the probate process at all, thus reducing your overall costs. There are limits to the amount you can give away tax free, so make sure you weigh the costs and benefits of taking this action. In many cases, however, you can help save your loved ones significant costs and hassles by giving them certain assets while you are still living.
Take Advantage of Trusts – Assets which are held in a trust can typically avoid the probate process all together because they will be dealt with based on the specific terms of your trust. Creating a trust for your primary beneficiaries can greatly reduce the probate costs, and speed up the process as well.
Keep in mind that there are limitations on each of these options put in place both by the Federal Government, and the Florida State Government. When completing your estate planning, make sure you are not going beyond any of the legal limitations that are in place or you could end up costing your loved ones more than you could have potentially saved them.
If you need help with your estate planning, or if you would like us to review your current plans, please don’t hesitate to contact us. We will be happy to discuss the specifics of your situation and help you to make the best possible decisions.