Probate is often a lengthy and costly legal process that can be stressful and emotionally taxing for the loved ones of a deceased individual (decedent).
For these reasons and many more, avoiding probate is a common goal for many people as they begin creating an estate plan and preparing for their future.
While there is no one-size-fits-all approach for avoiding probate in New Jersey, several strategies can reduce the likelihood that your estate will need to go through probate after your passing.
Use our guide below to learn more about the probate process, how to avoid probate in New Jersey, and how the estate planning attorneys at Weiner Law Group can help you create an estate plan that best suits your needs.
If you have questions, please contact us today to share your story with our knowledgeable attorneys.
First Things First: What Is Probate?
Probate is the legal process through which a decedent’s estate is administered after passing. This administration involves inventorying and appraising assets, identifying and paying off debts, and distributing remaining property to the heirs and beneficiaries of the deceased.
Because it is a formal legal process that requires court involvement, probate proceedings can be time-consuming and complicated. As a result, this can lead to significant delays before heirs and beneficiaries can receive their inheritances.
Additionally, probate proceedings frequently require extensive legal and administrative costs such as court, filing, and attorney fees. All of these costs will come from the decedent’s estate, reducing the overall amount of the estate that would otherwise be left to the decedent’s beneficiaries.
Thus, these are only a few drawbacks of the probate process that lead many individuals to seek ways to avoid probate.
8 Ways To Avoid Probate
Below are a few strategies to consider that may allow you to avoid probate entirely or, at the very least, may reduce the complexity of probate proceedings after your death.
A living trust is one of the most common strategies individuals use as a way to avoid probate in the future. Living trusts are legal agreements that allow the individual creating the trust (grantor) to hold and manage their assets in the name of the trust for the benefit of their heirs during their lifetime.
By transferring your assets into the trust, the grantor can maintain control over the trust property during their lifetime but avoid probate after their passing. Trust assets can be distributed directly to the beneficiaries named in the trust after the grantor’s death without court involvement.
Joint Ownership of Property
Regarding real estate, holding property in joint tenancy or tenancy by the entirety with rights of survivorship allows the property to pass automatically to the surviving owner upon the other owner’s death. Thus, if titled properly, joint property ownership can be one way to avoid probate for real estate property.
Beneficiary Deeds and Designations for Real Estate and Other Property
Another way to avoid probate for real estate is through beneficiary deeds. A beneficiary deed allows an individual to designate a beneficiary to inherit your real estate upon death.
New Jersey also provides a transfer on death beneficiary designation form, allowing individuals to designate a beneficiary to receive ownership of their motor vehicle after their death.
Beneficiary Designations for Certain Accounts
Certain accounts and policies, such as life insurance and retirement accounts, are considered non-probate assets. Proceeds from these will typically be distributed automatically to your named beneficiaries outside of the probate process.
However, it’s important to keep your beneficiary designations on such accounts and policies up-to-date to avoid potential problems and complications in the future.
Payable-on-Death (POD) and Transfer-on-Death (TOD) Designations
On bank accounts and other similar financial accounts, you may be able to designate payable-on-death (POD) or transfer-on-death (TOD) designations.
These are similar to beneficiary designations on life insurance policies and retirement accounts, and allow funds to pass to your named beneficiaries automatically upon death.
Only property that is part of your estate at the time of your death may be subject to probate. Thus, making gifts during your lifetime can reduce the size of your estate and decrease your available assets subject to probate.
Small Estate Procedures
New Jersey law also provides for simplified probate procedures for estates that fall below a certain monetary threshold: $50,000 if you are a surviving spouse or domestic partner, and $20,000 if you are the heir of an estate and there is no surviving spouse or domestic partner.
While small estate administration still requires some court involvement, the process is greatly simplified.
Family Limited Partnerships (FLPs) and Limited Liability Companies (LLCs)
Another way to avoid probate is through FLPs and LLCs. Placing certain assets, such as real estate or business interests, into an entity like an FLP or LLC can allow for a smoother transfer of certain assets after your passing without requiring probate.
Speak with a Trust and Estates Attorney at Weiner Law
Nothing in life is certain. However, there are always steps you can take to help you prepare for the future. One of the best ways to avoid probate is to have a plan in place before you pass away.
If you have questions about how to avoid probate and what steps might make the most sense for you and your situation, Weiner Law Group is here to help.
Our experienced trust, estates, and probate attorneys have a broad range of experience, allowing us to develop intelligent and personalized strategies and solutions to meet your needs and goals. Contact us today to schedule a consultation and learn more about how our team can help you plan for your future.
Do I Need a New Jersey Probate Lawyer to Avoid Probate?
Technically, you do not need a New Jersey probate lawyer to avoid probate. There are a variety of strategies you can use to prevent or reduce the likelihood of probate after your death that do not require the assistance of an attorney. Many of these strategies have strict legal requirements and formalities that must be complied with. Thus, having an experienced probate or trusts and estates attorney can be highly beneficial as you craft your estate plan.
Does a Will Avoid Probate?
In most cases, a will, on its own, will not be sufficient to avoid probate. However, with a well-drafted living trust, a pour-over will may be used to avoid probate.
Do I Need a Trust to Avoid Probate?
Trusts are an excellent option for someone looking to avoid probate. However, you do not necessarily need a trust to avoid probate. Other options that may allow you to avoid probate proceedings include joint ownership of property, POD/TOD designations, and beneficiary deeds and designations.