Probate is a legal process that enters the picture if you have property in your sole and direct personal possession at the time of your death. During probate the probate court determines the validity of the will, and the court supervises the administration of the estate. Inheritances are not distributed until after the estate has been probated.
The process provides certain protections, but the heirs to the estate may experience some negatives while the estate is being probated. One of them is the time factor.
The process can run its course in a little bit less than a year under ideal circumstances. This can be a significant length of time when you are waiting for an inheritance. More complicated cases can take much longer.
Cost is another consideration. There are a number of different expenses that can accumulate during the probate process.
A third drawback is the loss of privacy. Anyone who wants to know how you distributed your assets can access probate records.
Connecticut Probate Avoidance
When you hear about these pitfalls, you may wonder if it is possible to facilitate asset transfers outside of probate. The answer is yes, there are a number of different steps that you can take to avoid probate.
Simplified Probate Procedure
In the state of Connecticut, it may be possible to bypass the full probate process under certain circumstances, even if probate property is involved. A simplified probate procedure may be available if the value of the estate in question does not exceed $40,000 been there is no real property involved.
Payable on Death Accounts
When you open an account at a bank or brokerage, you can typically add a beneficiary if you choose to do so. These accounts are called payable on death accounts.
After you pass away, the beneficiary would inherit the money that remains in the account. The probate process would not be a factor.
A payable on death account can sound like a viable solution on the surface, but there are numerous limitations. One of them is the fact that you may not be able to add more than one beneficiary depending on the policies of the institution in question.
In other cases, you can add multiple beneficiaries, but you are required to allow for equal distributions between the beneficiaries.
Plus, there is no built-in mechanism for addressing the possibility of incapacity, and there is no asset protection.
Life Insurance Policies
If you have insurance on your life, the beneficiaries that you name would inherit the insurance proceeds directly after your passing. The distribution of the proceeds would not be subject to the process of probate.
Joint tenancy is another way of describing co-ownership of property. If you were to add a joint tenant to property that you own, the joint tenant would own half of the property.
After you pass away, the joint tenant would inherit the entirety of the property outside of the probate process.
The probate avoidance angle may sound appealing, but there is a major negative to consider. When you add a joint tenant, the joint tenant assumes partial ownership of the property right away. As a result, that portion of the property could be attached if the joint tenant was to run into financial difficulties or legal problems.
The revocable living trust is one of the most reliable probate avoidance tools. With this type of trust you maintain control of the assets while you are living. You can act as the trustee and the beneficiary initially, and you can revoke or rescind the trust if you choose to do so.
When you are creating the trust agreement you name a successor trustee, and you name a successor beneficiary or beneficiaries. After your passing, the successor trustee can distribute monetary resources to the successor beneficiaries outside of probate.
There are other types of trusts that can facilitate asset transfers outside of probate. They are used when people have additional concerns.
Schedule a Free Consultation
As you can see when you digest the information that we have provided in this blog post, there are many different ways that you can facilitate future asset transfers to your loved ones. The best way to go about it will depend upon your objectives, your financial situation, and your family dynamic.
We can help you understand your options if you are ready to take action. Our firm offers free consultations, and you can send us a message through our contact page or call us at 860-548-1000 to set up an appointment.