Strategies to Avoid Probate in Connecticut - Probate Lawyers

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Probate Lawyers in Connecticut

There are many good reasons for wanting to keep your estate out of probate. Settling ones final affairs through Probate can be more expensive compared to other options.  One of the biggest objections to using probate is that everything in probate is a public record, and in probate a will or the executor of the will can be challenged, which can lead to assets going to people you didn’t intend to receive them. In Connecticut, there are several strategies that probate attorneys and estate planning attorneys use to help clients keep their estate and all their hard-earned money and property out of probate.

Using Trusts to Keep Assets Out of Probate in Connecticut

One of the key tools for keeping estates out of probate is the trust.  A trust is a legal entity that can own property or assets and is managed by an appointed individual, board or firm, the Trustee.  What the Trustee does with the assets owned by the trust is determined by the trust’s terms.  The terms of the trust are determined by the trust’s creator at the time of the trust’s creation.  By creating a trust and transferring ownership of assets to that trust, those assets don’t pass through probate because they aren’t owned by in your individual name at the time of your death.  Instead, the Trustee distributes your assets as you’ve dictated in the trust document.  A trust can also retain the assets beyond your death and reserve them for distribution at a later time or in increments.  Trusts provide more flexibility for passing wealth on to heirs and other beneficiaries than any other single estate planning tool.

There are two kinds of trusts: irrevocable trusts and revocable or living trusts.  A revocable or living trust can be cancelled or changed by its creator at any time prior to death.  In most cases the Trustmaker will be the initial trustee of a revocable or living trust.  Many people use a living trust to hold assets during their lifetime and include terms that cause the assets to be transferred to an irrevocable trust upon their death.  This allows lifetime protection against creditors and highly flexible options for assets in the irrevocable trust while keeping assets accessible during the beneficiaries’ lifetime but out of probate.  Once put in place most irrevocable trusts cannot be cancelled or changed, but they offer many other benefits such as protection against creditors.  However, if a creditor has a claim against you they can usually reach assets you placed in a living trust.

Keeping Assets Out of Probate without a Trust

Although trusts are one of the most effective tools for keeping assets out of probate, there are times when a trust is not appropriate or the testator (the person leaving the estate) chooses not to use a trust. For these circumstances, there are three other ways to keep assets out of probate:

  1. Owning assets jointly with another person with rights of survivorship
  2. Use Payable-on-Death assets
  3. Use Transfer-on-Death assets

Joint Ownership with Rights of Survivorship

In Connecticut, vehicles, real estate or real property, bank accounts and some other kinds of property can be owned jointly by two or more people. Known as joint tenancy (for real estate) or joint ownership, this strategy is often used by married couples to ensure that the house, car, etc. goes to the surviving spouse when one spouse dies without the hassle and cost of probate. However, it’s important to make sure that the ownership agreement provides rights of survivorship. If rights of survivorship are not included in the joint ownership agreement, then an owner’s interest in the property goes through probate when he/she dies instead of passing directly to the other owner. Your Connecticut probate attorney can make sure your joint ownership agreement includes rights of survivorship along with other state requirements to make this strategy work.

Transfer-On-Death Assets

Vehicles, securities (i.e., stocks and bonds) and retirement accounts can be registered so that ownership passes directly to the beneficiary you designate. In some states, real estate can also be registered to transfer on death, but Connecticut law does not allow transfer-on-death deeds for real estate. To take advantage of this strategy, you must designate the beneficiary on the registration or title of the asset prior to death. At your death, the beneficiary deals directly with the broker or transfer agent.  In the case of vehiclesa beneficiary deals directly with the Department of Motor Vehicles.  Transfer-on-death assets do not go through probate as long as there is a living beneficiary to receive ownership after your death.

Payable-On-Death Assets

Bank accounts, certificates of deposit, and life insurance policies can be registered as payable-on-death accounts and work similarly to transfer-on-death assets. However, instead of the account or policy passing to the beneficiary, the cash value of the asset is paid directly to the beneficiary when they submit a copy of the death certificate and identification. These assets will not pass through probate as long as there is a living beneficiary to receive the payout after your death.

For both payable-on-death assets and transfer-on-death assets, be sure to keep your beneficiary designations up to date and always name a secondary beneficiary to receive the asset in case the first beneficiary does not survive you. These kinds of assets will go through probate if the primary beneficiary is deceased at the time of payout and no secondary beneficiary is named. Sometimes a person will name their spouse as beneficiary without a secondary beneficiary designated and then both spouses die in a car accident or similar tragedy and the asset must go through probate. So always designate one or more secondary beneficiaries.

Additionally, because the beneficiary must take action to receive a transfer-on-death asset or payable-on-death asset, it’s important that you let all beneficiaries know about the assets you are leaving them, so they can claim ownership after your death. At the very least, include a list of non-probate assets and the beneficiaries you’ve chosen to receive them with your will or trust deed. Your Connecticut probate attorney or estate planning attorney can help you put everything in place properly.

Leave More for Your Loved Ones — Weatherby & Associates Can Help Keep Your Estate Out of Probate

Proper advance planning can keep an estate out of probate altogether, eliminating unnecessary costs and avoiding the possibility of assets going to someone you didn’t choose to receive them. If you want to ensure your hard-earned assets benefit the people you intend and aren’t consumed by probate costs, taxes and other expenses, the Connecticut probate attorneys attorneys at Weatherby & Associates, PC can show you how.

Call our Hartford County probate attorneys toll free today: 888-822-8778.

Probate Lawyers in Connecticut

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