Probate court proceedings are notorious for taking months to complete and for being very expensive. At least a portion of someone’s assets will usually go toward estate administration costs, and if too many of their valuable assets go through probate court, they may have to pay estate taxes to the state of New York and the federal government.
Testators in New York, therefore, have many reasons to keep their property out of probate court whenever possible. Doing so often requires creative planning long before someone’s final days. These are two of the most effective ways for people to keep their assets out of probate court.
Arranging for direct transfer when someone dies
There are ways to have specific assets transferred directly to a beneficiary after someone’s death. An individual can add a transfer on death designation to financial accounts so that won’t a recipient can take direct control over the account without going through probate court first. It is also possible to change the title for real property so that it transfers to a co-tenant at the time of someone’s death. Some people also have deeds executed to record after their death, although that method may trigger other forms of taxes, like capital gains taxes.
Moving assets to a trust
When someone has a diverse personal portfolio and wants to avoid taxes and minimize probate responsibilities as much as possible, they may decide that a trust is the ideal solution. People can fund a trust with all different kinds of assets, ranging from collectibles and personal property to businesses and real property. The assets in the trust are not in their name anymore, which means that they won’t have to pass through probate court when they die. The testator can also retain some control over the utilization of those assets, such as putting restrictions on how much people can access at once or for what reasons they can withdraw trust assets.
Typically, people will need to perform a thorough review of their assets and family circumstances to determine the best solution for keeping their resources out of probate court in New York. Discussing one’s estate planning goals, such as probate minimization, with a New York probate and estate planning attorney may help those with valuable resources arrange for the most hassle-free transfer of those assets after their death.