Probate can take anywhere from a few months to several years. It's expensive. Court fees and attorney's fees can come to around 5% of the estate's value. Hence, it is always better to avoid probate. There are possibilities to do this well within legal limits. The first possibility is to set up a living trust and name someone (a close friend or a relative) to be the trustee and to manage all his properties. When the person dies, the trustee pays the descendant's debts, taxes and all other expenses, and then distributes the balance of the property to the beneficiaries. A living trust retains the privacy of the decedent and his heirs, and averts part of the estate tax, which is not possible if the properties are probate. One popular form of living trust is the revocable trust. As the term suggests, the trust can be revoked at any time by the person who sets it up. A second possibility is to institute an AB trust. This trust allows a married couple to preserve their unified credits and permits up to twice the total estate for transfer to heirs without estate tax. Thus AB trusts reduce or eliminate the total tax which the couple would have paid otherwise. The third possibility is to gift all his properties to his heirs and beneficiaries. Though he pays some gift tax, it is far more economical than to let it undergo probate. But one problem is that the individual cannot guarantee that the gifted properties can be obtained back. The fourth possibility is to go in for a joint property. This will render the property transfer to the joint signatory automatic on the individuals death. |
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