Planning Ahead to Avoid High Probate Costs
Probate can become particularly complicated and more expensive when the will is contested, when there are disagreements between beneficiaries and executors, and if the estate had complex debts and owed outstanding taxes.
While thinking about your or a loved one's death and preparing for it is not a welcome idea, it can save beneficiaries a lot of anguish. This is where estate planning comes into play. Before the estate holder passes away, they should create a personalized estate plan. This involves creating a will and naming beneficiaries for assets such as bank account balances, cars, property, etc.
Another strategy for reducing probate costs is reducing the estate's size. This can be achieved through living inheritances. Essentially, this involves giving away assets while you're still living.
Other strategies you can use to smoothen the probate process and reduce costs include:
- Setting up a trust and placing your assets within its care;
- Creating joint accounts with a spouse wherever possible;
- Settling as many outstanding debts as possible, particularly complex debt like credit card debt.