Property that passes through probate generally includes the property a testator (the person who prepares a will) devises to specific heirs in the decedent’s will. Any property that passes to intestate heirs is also considered probate property.
The advantages of avoiding probate
It is usually less expensive and less costly to transfer assets outside of probate. Any property of a decedent that passes through probate will likely be subject to a Pennsylvania inheritance tax. In very large estates, the probate property may also be subject to the federal estate tax. Property that passes through probate is normally not distributed until the distribution of the assets is approved by the judge assigned to handle the probate estates. Approval by the judge can take months unless the heirs reach an agreement.
Another advantage of avoiding probate is to avoid the possibility of probate contests. Any natural heir who thinks he/she did not receive their fair amount may look for ways to contest the validity of the will or the appointment of an executor or an administrator. If the property does not pass through the probate process, then that the property is safe from any disputes.
Common probate avoidance strategies in Berks County
Fortunately, there are many ways skilled Berks County lawyers help testators avoid probate. Some of the common methods used to avoid probate in Pennsylvania are the following:
- Tenants by the entirety. Spouses in Pennsylvania are allowed to own property as tenants by the entirety. The main asset that spouses normally use for this method is the home. If the home, or any other asset, is titled as tenants by the entirety – then the spouse who survives the death of his/her spouse becomes the full owner of the home or other asset. Property that passes by tenants by the entirety does not pass through probate. Our skilled lawyers help retitle the property in the name of the surviving spouse.
- Joint tenants with the right of survivorship. This strategy is similar to tenants by the entirety except that any two or more people can use it. The people do not have to be related. When one joint owner dies, the property passes, outside of probate, to the surviving joint owners.
- Payable on death accounts. These accounts are often used for bank accounts including checking accounts, savings accounts, and certificates of deposit. The accounts must be titled payable on death to a specific person. Here, you own the bank account. The person or people you name to receive the account assets when you die has no control over the account while you are living. When you die, the account is payable to the specific person.
- Named beneficiary accounts. These accounts are similar to payable on death accounts. These accounts name one or more beneficiaries. When you die, the account is payable to the named beneficiary. Common examples include life insurance policies and retirement accounts such as IRAs.
- Trusts agreements. You can avoid probate of assets that you place in a trust. You must name a trustee to manage the trust and you must name the beneficiaries of the trust. Trusts are generally created while you are alive. The trustee is normally someone you trust to care for a spouse, children, or other relatives. Trusts can also be created to benefit nonprofits and charities that you care about. Trusts can also come into existence, through a “pour over” trust when you pass away.
- Gifts. You can just give away your property before you die. Generally, to avoid any taxes, the taxes must be several years before you die. Your estate planning lawyer can explain the precise time limits.
Depending on the value of the estate, if property does pass through probate, you may be able to handle the administration of the estate through a small estate process which is normally faster and less expensive than the formal estate process.
Talk with an experienced Berks County probate and estate planning attorney now
At Antanavage Fabiarz, our seasoned wills and estate lawyers help seniors and others plan for the day when they pass away – by helping prepare the correct legal documents such as wills and trusts to meet your goals. We help reduce the amount of property that passes through probate. Contact Antanavage Farbiarz, PLLC, today by phone or by filling out our contact form.