Time is money and when someone passes away, it becomes an unfortunate fact. Heirs may need access to the estate to pay up bills they may have cosigned on or to care for dependents. Because of this, while probate is an important part of estate administration, you might also want to consider setting a few assets aside that go directly to heirs.
There are several options available to make this happen. Here are a few of them.
Use account beneficiary features
If you have a life insurance policy, you already have a beneficiary named. Double-check to ensure this is still the person you want to receive your money. Did you know that even your bank accounts and investment accounts might have beneficiaries designated too? MarketWatch recommends looking into Transfer on Death and Paid on Death features. Check the website or make a few calls.
Create a small estate
MarketWatch explains that, in California, a small estate is worth $166,250 or less of probate assets. If you can reduce how many assets pass through probate using the tips above and others, your heirs may get access to probate assets much faster and pay fewer fees. You may need to fill out some paperwork ahead of time and keep an eye on your assets to ensure you do not pass the threshold.
Keeping an updated will in the state of residence
MarketWatch estimates that 60% of Americans do not have any estate plan in place, including a will. Of those who do, some may have created a will in a former state of residence and never updated it. This might drag out the probate process and cause states to spend a lot of time deliberating over which one is responsible for what assets. Perhaps, even worse is having no will at all as the state decides who gets what.
Some families prefer to ensure items go through probate so that everything gets accounted for and follows due process. Even so, keeping probate assets at a lower value may benefit your heirs in the short and long term.