Many people in Florida agree that avoiding probate is wise because the process can be complicated, time-consuming and expensive. You should take steps to minimize the impact it could have on your loved ones. Here are four tips to help you avoid probate costs in your estate plan.
Establish a trust
If you can clearly designate who will inherit your property after death, there won’t be a need to go to probate court. Make sure that your trust is up to date because if you leave any asset outside those documents, the court could get involved to solve any conflicts about that item. A will is also good, but the court must go through it to confirm its validity before allowing your executor to distribute your assets.
Name a beneficiary for your retirement accounts
When creating a retirement account, you will be asked to name beneficiaries to those accounts if something happens to you. These accounts often bypass the probate process and go directly to the people you named. Such accounts include 401(k) plans, pension plans, stock, bonds and life insurance.
Make charitable donations
If you make donations to qualified charities in Florida, the IRS can provide you with a tax deduction on your property. This will help reduce your taxable estate and minimize the amount of money your loved ones will have to pay while inheriting your assets.
Hold property jointly
Consider holding your property jointly with the person you want to leave it to. For example, if you buy a new house, you can name your spouse or child as the other owner with the right of survivorship. When you pass, that property will automatically go to the other owner without passing through probate.
The basis of a good estate plan is to ensure that your loved ones get their inheritance the way you want them to and with minimum estate or income taxes. To ensure this, you’ll want to consider all the available estate planning financial tools and find the best one for your assets.