How to Avoid Probate

In our last post,  we discussed the probate process. Today we will be discussing ways that you may be able to avoid probate of your estate. Read on to learn how!

As we’ve previously discussed, probate can be both a costly and lengthy process. We’ve laid out a few options that you may be able to use to avoid probate, below:

SMALL ESTATE AFFIDAVIT:

You can use a Small Estate Affidavit to transfer personal property that is valued at less than $50,000. A Small Estate Affidavit can be used for personal property, like a car or bank account, but it cannot be used to transfer real property, like a house or mineral interest. The rules surrounding a Small Estate Affidavit are set by Oklahoma laws. The laws are very specific with how you can use the Small Estate Affidavit. For example, a Small Estate Affidavit cannot be used if there is a probate proceeding pending. A Small Estate Affidavit is a curative instrument and should not be used in lieu of a well designed Estate Plan.

AFFIDAVIT OF DEATH AND HEIRSHIP:

Do you own mineral interest in Oklahoma? Mineral interest can be valuable and getting an oil and gas company to pay you without a probate may be difficult.

In lieu of a probate, you may be able to use an Affidavit of Death and Heirship. The rules surrounding an Affidavit of Death and Heirship are set by Oklahoma laws. The laws are very specific with how you can use the Affidavit of Death and Heirship. Just as a probate gives the mineral owner marketable title, an Affidavit of Death and Heirship also gives marketable title as long as the laws were followed. Laws require the Affidavit to be filed in the county the mineral interest is located for 10 years, among numerous other requirements. An Affidavit of Death and Heirship is a curative instrument and should not be used in lieu of a well designed Estate Plan.

ASSETS THAT PASS OUTSIDE OF PROBATE:

There are several types of assets that by their nature pass outside of probate and would automatically transfer ownership. Here are a few examples:

• Bank account owned jointly or with a Payable on Death

• Property owned as joint tenants, such as a home or mineral interests

• Life insurance policy with a beneficiary listed

• Retirement Accounts with a beneficiary listed

Although these assets pass outside of probate, they should not be your estate plan. There are pitfalls relying upon these assets to transfer automatically. It doesn’t account for incapacity, minor beneficiaries, or possible tax consequences for transferring certain types of property.

REVOCABLE TRUSTS:

To bypass the requirement for a probate, you can create a revocable trust. One of the most important parts of setting up a trust is putting your assets into the trust, which is called funding. You can also choose to be the trustee or appoint a third party. A trustee is in charge of managing the trust. Upon your death, the assets in the trust would automatically be distributed by the terms of the trust. The terms of a trust and the options inside your trust are plentiful. You can also set up various types of distributions based on the needs of minor children, children with special needs, or that third cousin that can’t manage their money correctly.