Each state has its own ways to avoid probate. In general, most people want to avoid probate because they have specific goals with how and who receives their inheritance. Probate avoidance is not the end all. BUT most people don’t realize that there are EASY ways to reclassify your assets from PROBATE to NONPROBATE.
Remember our rule of thumb: everything you own in life is either labeled as PROBATE or NONPROBATE. If you can move everything to the NONPROBATE side, your estate in all likelihood will avoid probate. Your heirs and relatives will probably thank you for it!
Here are 6 easy ways to move assets from PROBATE to NONPROBATE:
1. Joint Ownership
In MN, you can move real estate or certain investment accounts into joint ownership. This means that the surviving joint account holder or joint tenant is entitled to automatically receive your share of the asset.
2. Transfer on Death Deed – TODD
MN allows you to create beneficiary designations for your real estate. There is a specific but simple process you must follow. However, if you do it right, you can make it easy to move real estate to your heirs after you die.
3. Gifting
A lifetime gifting strategy allows you to start reducing the probate assets you might own.
4. Living or Revocable Trust
Every week, someone asks me about a trust. A trust is an excellent tool to retitle probate assets and have them placed into a trust managed by a trustee of your choosing.
5. Insurance
Yes, insurance is a great way to pass an inheritance to heirs. As long as you have valid beneficiary designations on the life insurance policy, you are good to go!
6. Beneficiary Designations and Payable on Death Designations
If you own bank accounts, investment accounts, 401Ks, IRAs, simply make sure that your beneficiary designations are current and up-to-date. So many times people don’t check these and if the beneficiary is already deceased or there is none, then that item will be labeled as PROBATE.
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