For many families, a loved one’s death brings immediate financial challenges. Surmounting them can feel impossible during a time of grief. The combined impact of medical and burial costs, lost income and debt is often severe. Some families find themselves unable to cover everyday expenses on top of it.
Delaware requires probate in most cases. Probate collects your assets to pay any applicable debts and taxes. Then, the rest of your estate gets distributed among proper heirs or intended beneficiaries.
Probate is used in estate planning to:
- Legally validate a will and protect against fraud
- Keep creditors from pursuing your family members for unpaid debts
- Prevent asset distribution disputes
However, exploring alternatives may also benefit your family if you wish to avoid the costs and delays associated with the court-supervised probate process.
Strategies for minimizing probate
You can employ legal strategies to transfer your assets directly to your beneficiaries to minimize probate. Alternatives that you can consider, include:
- Setting up a trust: You may transfer assets into a living trust and appoint a successor trustee to manage its distribution to your beneficiaries after your death.
- Owning property jointly: When rights of survivorship apply to a property held in tenancy by the entirety or joint tenancy, they automatically pass to the surviving owner upon your death.
- Gifting during your lifetime: You can transfer assets by giving them away as gifts. Use annual and lifetime gift exemptions to lower your estate tax.
- Designating a payable-on-death (POD) beneficiary: Adding POD designations to bank accounts lets your beneficiary claim the money directly from the bank upon your death.
- Designating a transfer-on-death (TOD) beneficiary: Register stocks and bonds in TOD form to allow your beneficiary to coordinate a transfer of account with the brokerage company after your death. You can also register a vehicle in TOD to transfer ownership to your beneficiary upon death.
- Undergoing simplified probate: Delaware allows estates valued under $30,000 to skip probate and undergo the more straightforward and less costly small estate administration.
Save your loved ones from stress and help secure their financial future with the help of an estate plan. Consulting a probate and estate administration attorney is advisable to determine the suitability of probate and its alternatives to your estate and family.