Will Your “Stuff” Avoid Probate?


Will Your “Stuff” Avoid Probate?

By: Donna J. Schuchart, Estate Administration Coordinator

According to Gallup.com the average retirement age in the U.S. is 61 years old. The average life expectancy is about twenty years later around 80 years old. These studies paint a picture of the reasons to strategically plan to have financial means to support yourself during what is hopefully a long period of retirement. Having a strategic plan for what happens to your “stuff” when you pass away isn’t much different.

Any person with “stuff” has an estate. We’re used to believing this term implies significant wealth but in reality, an estate consists of all of a person’s belongings at the time of their death, creating the reality that almost everyone has an estate. For the purposes of this article, let’s refer to a person’s “stuff” as their assets.

A person’s estate could consist of many kinds of assets and will be unique to each individual. It’s common for a person to want to make sure their assets avoid probate. What is probate, you ask? Probate is the court-supervised process of settling a person’s estate and wrapping up their affairs. There are fees involved, the process is public, and the timelines are lengthy. Generally, a Delaware estate would go through probate if the decedent individually owned real estate and/or $30,000 in value, or more, of assets. With such a low threshold, most Delawareans need to strategically plan ahead to avoid this process.

A helpful starting place in avoiding probate is identifying the assets a person owns and how they are titled. Generally, most assets that are jointly titled with another individual avoid probate. Assets with beneficiary designations, including payable on death and transferrable on death designations, avoid probate as well.

Experienced elder law and estate planning attorneys have the knowledge to help their clients plan to avoid probate, while simultaneously managing the riskiness of beneficiaries, the need for estate liquidity, and the client’s goals for the inheritance they leave. In complement to opportunities for joint ownership and beneficiary designations, attorneys practicing in this area commonly use Revocable Living Trusts as the primary estate planning document in their client’s portfolio.

Revocable Living Trusts should title a client’s assets, or sometimes be named as the new primary beneficiary of an asset. We refer to this as proper asset alignment. These adjustments in titling do not in any way limit the client’s use, access to or freedom with the asset. Instead, they ensure that with one simple titling change, a client’s assets will avoid probate, the client will have the support of their trusted family, friends or professionals without opening their asset to those individuals’ risks, and the client’s estate will pass as they wish to the people or charities of their choice.

Understanding the probate process and identifying the difference between probate and non-probate assets is just the beginning. With strategic planning a person can avoid this burdensome process for their loved ones and create a thorough plan for what happens to their estate when they pass away.