Any property that belongs directly to one person becomes their estate after they die. The assets included in an estate must pass through probate court. Frequently, those assets are vulnerable during the probate process.
Creditor claims, taxes and even Medicaid recovery efforts can result in outside parties gaining an interest in assets that the decedent may have wanted to leave for specific beneficiaries. There are numerous ways to prevent real property from passing through probate court, including the three strategies below.
1. Signing a transfer-on-death deed
The state recognizes deeds drafted in advance and recorded after the property owner dies. Transfer-on-death deeds allow an owner to retain control until their passing and to keep their real estate out of probate court after they die.
2. Taking on a co-owner while alive
It is possible to hold real property in a manner that keeps it out of probate court after one owner dies. Joint ownership is one way to facilitate transfer that does not involve the probate courts. People may need to execute deeds to add new co-owners or to change how they hold title to ensure their co-owners promptly inherit their interest in the property.
3. Creating a trust
In cases involving blended families or beneficiaries with special needs, a trust may be a better solution than a deed. The trust can own the property and oversee possession of the property. It can also transfer ownership to specific beneficiaries when those designated as long-term occupants or tenants die.
Creating a custom, thorough estate plan can optimize what beneficiaries inherit and reduce the loss of valuable assets during the probate process. Effective solutions for real property can help homeowners ensure the right people inherit their homes or the equity they have accrued.