Understanding Probate Real Estate
In the past, people really did not mind the fees of probate in real estate. That is because back then, it was very affordable. However, in 2005, things changed and the fees increased significantly. To this day, the fees are still on an upward trend that people are doing everything that they can to avoid probate court
But what is probate? The first thing that people think of is that it is long, taxing and not worth their time. While many have good reasons to have such an opinion, probate by definition is a court process that is used to settle the land or estate of a person who recently passed away. Unlike what many people think, probate is done regardless of whether or not the deceased person left a will. As a standard, the executor whose name is in the will has to go to the superior court to for the properties.
While it probate generally makes sense, why is it beneficial to avoid probate in real estate? Well, to give you an idea of the numbers at play. The filing fee before 2005 for an estate amounting to 1 million dollars was only 3000 dollars. Today, it costs 400 dollars. An estate worth 1.5 million dollars that used to have a filing fee of 3000 dollars is now double the rate at 6000 dollars. That amount is no joke considering the tough economic times. Add that to the time you will waste during the process and all the efforts, many people would agree that it is just not worth it.
The good news is there are ways to avoid probate in real estate. With just a little know how, you can spare yourself the heartache, headache and the unnecessary cash out.
So what are the 3 ways to eliminate probate court fees?
- Create a Living Trust. By creating a living trust, you can avoid probate not just for an estate but practically everything that you own. That includes bank accounts, cars and the list goes on. Simply create a trust document which is very similar to a will and appoint someone to take over the trustee after death. Remember to transfer the property ownership to yourself. That way, your appointed trustee will be able to transfer your assets without having to go through the hassles of probate in real estate.
- Have a joint ownership with your property. Just make sure that there is a clause that includes “right of survivorship”. That means that in case of death of a partner, the surviving one automatically gets the estate. All this will take is to show the joint ownership documents and there will be no probate charges and procedures that will apply.
- POD or Payable on Death. Set up a POD account. Your beneficiary cannot touch the money until the time of death. At that time, the beneficiary has the right to withdraw the money and claim it as his or hers.
Make sure you take the time to talk with a Probate Attorney in order to evaluate the best options for you and your family.