When someone passes away either with or without a will, the estate may enter probate. Probate refers to the legal process where the court oversees the payment of debts and asset distribution. Often, asset ownership transfers go through probate. Some assets may pass outside of probate so the Kentucky court does not become involved. Effective estate planning may focus on avoiding probate by utilizing other legal ways to transfer assets on death.
Probate and its possible troubles
Probate takes time and comes with legal fees. Probate might also involve challenges, such as when someone contests the will. Even if the court dismisses the challenge, beneficiaries might experience significant stress.
Not everyone realizes that probate isn’t always necessary, though. Probate becomes unavoidable when someone owns something in his or her name exclusively. So, when the person passes away, either a will or Kentucky intestate laws determine who receives the property. However, joint ownership and beneficiary designations could bypass probate.
Common ways to avoid probate
Joint ownership that affords rights to a survivor eliminates probate. When two people own a home, and the deed reveals it is jointly owned with “rights of survivorship,” the deceased’s ownership passes to the survivor on death. Jointly held banking, investment, and retirement accounts may pass the same way.
Naming a beneficiary is an alternative to joint ownership when possible. Financial accounts could offer the ability to name a beneficiary. The beneficiary would take over the account when the benefactor passes away.
Even if nothing goes through probate, creditors may seek to recover obligations from surviving relatives. An attorney may advise survivors on how to address estate debts. Estate planning meetings with an attorney could involve discussing ways to avoid probate. Clients may change or update their plans when necessary.