Probate is the process of transferring your assets to your beneficiaries through the courts when you pass away. This process ensures that funds go to pay debts, taxes, and creditors before going to your beneficiaries. Many people choose to put their assets in a trust to avoid probate court, however.
If you have certain estate planning tools in place, your estate can avoid probate and pass directly to your beneficiaries as opposed to going through probate.
The benefits of avoiding probate
According to the Florida Bar website, avoiding probate may very well save you money and time. The probate process can be costly and time-consuming. It is important to note, however, that some of the time and money costs associated with probate will also be necessary if you have a revocable trust because the process is so similar. A trustee will take the place of the court, however, when it comes to collecting and valuing the assets, determining creditors and beneficiaries, paying taxes and other expenses and finally distributing the trust. Additionally, a trustee is generally entitled to receive a fee for their services. The savings associated with avoiding probate will depend on your specific situation and might be either marginal or substantial, depending on the complexity of your estate.
If you have assets located in multiple states, however, avoiding probate is preferable. For example, if you own real estate in multiple states, probate is generally required in each state where your real estate is. You can typically avoid this by transferring the ownership of your real estate to your trust, which will save much more time and money.