To avoid probate, the spouses should establish revocable trusts and transfer their property to the trusts during their lifetime.
Estate planning may seem easy between spouses, but beware of the pitfalls of probate. The law tends to put a number of things on autopilot, so loving spouses with few other goals or concerns might just let things run their course … and probate is lurking around the estate planning corner.
If you want to keep your estate out of the court, then there are certain steps you need to take and certain traps you need to avoid. This is discussed in the final installment of a three-part series for married couples in Forbes titled “Estate Plan Funding for Spouses.”
Indeed, probate truly is a court proceeding which can be chock full of court rules, court timelines, and time spent idling in the clerk’s office. Any plan that lets the courts pick up the pieces of your estate plan falls into that rut. In addition, if your estate attracts any detractors or encounters other complications, then it is likely to stay there for some time. As a result, many people seek to have their estate skip straight on past those dark court corridors.
As pointed out in the original article, and the previous ones in the series, revocable trusts are powerful tools even for spouses that fall well below certain estate taxation thresholds. However, there are other means to pull one asset or another away from the probate fires.
The original article has some specific suggestions worth consideration. If nothing else, it’s worth a read to see just how many ways there are to plan for certain assets and various little steps to take that may provide big rewards.
Reference: Forbes (May 27, 2013) “Estate Plan Funding for Spouses”