Probate is actually a simple process. It is the act of transferring someone’s property upon their death. It may seem surprising for probate to be so simple because probate has a reputation of being a costly and difficult procedure. This is indeed true — probate can be costly and difficult. However, if you address your estate and your property in an effective and efficient manner, you can actually “skip” probate.
The biggest problem with probate is that it takes a lot of time and there are certain taxes applied during the process that can really sap an estate of its finances. Thus skipping probate is advantageous. So how does someone skip probate?
The four most common ways to skip probate are joint property ownership, death beneficiaries, revocable living trusts, and gifts.
Joint property ownership is exactly how it sounds: two people jointly own a piece of property. The key here, though, is that when one of the co-owners passes away, the property automatically passes on to the other, still living, owner. This allows that piece of property to bypass the probate process.
Death beneficiaries are simple wishes that a person makes clear in their estate plan for how their assets should be passed on. Financial accounts, retirement accounts and many other assets can be passed to other people upon death, allowing those assets to skip probate.
Revocable living trusts allow a person to transfer an asset or piece of property to another person (the trustee) for the benefit of another (the beneficiary). The grantor in this case could dictate under what circumstances or time period the asset should be passed on to the beneficiary.
Last but not least are gifts. To utilize gifts, a person needs to gift their assets or property to someone else before they die. As such, since the assets or property don’t belong to the gifter when he or she dies, they are not subject to probate.
Source: FindLaw, “Avoiding the Probate Process,” Accessed March 9, 2016