Tips to Avoid Probate
September 8th, 2022
Probate is the
Here are four common avenues you may be able to utilize to avoid probate formally:
1. Create a Living Trust
One of the most effective ways to avoid probate is with a living trust, also known as a revocable trust. When you create a living trust, you name yourself as the trustee — this means you do not relinquish control over the assets in the trust during your lifetime. A successor trustee is designated in the trust instrument who will take over after your passing and distribute the property directly to your heirs without supervision.
Nearly any asset you own can be placed in a living trust to avoid probate in North Carolina. For instance, bank accounts, real estate, and even small business interests can be put into a trust. Not to be confused with irrevocable trusts which cannot be revoked once created, these types of trusts can be modified and changed at any time before you pass away.
2. Consider Joint Ownership
Property titled in joint tenancy with a “right of survivorship” passes to the surviving owner automatically upon the death of the other owner. Probate is not necessary in these cases. Joint tenancy can work well when people acquire real estate, vehicles, bank accounts, and other property together, whether they are married or not.
Real property may also be owned as a tenancy by the entirety. Similar to a joint tenancy, a tenancy by the entirety is only available to married couples for real estate. With this type of ownership, the marriage owns the real estate, rather than the individual parties.
3. Add a Beneficiary to Your Accounts
Many different types of accounts — including retirement accounts and life insurance policies — allow for a beneficiary designation. When a beneficiary is named for an account, the assets in it are paid directly to the beneficiary upon your passing. Since the funds are not considered part of the estate, they don’t have to go through the probate process.
In addition, bank accounts, brokerage accounts, and stocks can have “
4. Using the Spousal Allowance to Avoid Probate
North Carolina’s estate laws provide a critical benefit to married couples — the spousal allowance. When a spouse passes away and leaves another behind, the surviving spouse is automatically eligible to receive a
In the event the decedent’s estate is not large enough to cover the spousal allowance, a deficiency judgment will be issued by the court clerk. If the surviving spouse wishes to apply for a higher amount of spousal allowance, they may do so by petitioning the court for a special proceeding. The maximum spousal allowance the surviving spouse can receive is half of the deceased spouse’s average annual net income for the three years immediately before their death.
Under certain circumstances, a dependent child may also be entitled to a $5,000 allowance.
Contact an Experienced Southern Pines Estate Planning Attorney to Avoid Probate
By planning ahead, you can help your loved ones avoid probate in North Carolina. A skilled trusts and estates attorney can help you create a comprehensive estate plan that meets your goals and objectives. Carolina Tax, Trusts, & Estates is committed to providing clients with
Categories: Estate Planning