First and foremost, while you read a lot about the evils of probate and why it should be avoided, this is not a black and white issue. There are many excellent reasons to avail yourself of the probate process, and a decision on whether or not to structure your plan to avoid probate should be made after consultation with an attorney and a thorough understanding of the advantages and disadvantages of using probate, and of avoiding probate.

Four Reasons to Avoid the Probate Process
  1. Probate can be a time consuming and expensive process. On average, probate costs in Connecticut anywhere from four percent to ten percent of an estate's value. This means that an estate worth $400,000 could cost $16,000 to $40,000 to probate. A good portion, but not all, of these costs may be minimized by avoiding probate.
  2. The typical probate process lasts about one year, but can drag on much longer if it ends up in litigation. Litigation or prolonged court involvement can be stressful for families, causing disharmony, and can also leave valuable assets tied up in the court system to potentially decrease in value if not properly invested.
  3. The Probate process gives a feuding family a forum to air their grievances which can precipitate fights which may have been avoided had the distribution of assets proceeded privately.
  4. Probate proceedings are public and anyone can read the file, which can seem like an invasion of privacy in an already difficult time.
Three Ways to Avoid the Probate Process

Probate may be avoided in almost every instance with proper planning. Some of the most common methods of avoidance are as follows:

1. Owning property through "joint tenancy" or "in survivorship".
  • What it is: This arrangement is popular with married couples and effectively allows each spouse to own "all" of the property.
  • How it works: When person dies, the survivor owns the entire property automatically.
  • The downside: During life, creditors of each joint owner may attach the entire property for repayment of debt. Probate is only avoided on the 1st death, unless the survivor adds a new co-owner after the 1st person's death.
2. Making a lifetime gift.
  • What it is: A "lifetime" gift is a gift made by the owner of the estate while he or she is still living. These gifts are not subject to probate.
  • How it works: Anyone can make a gift of cash or property to anyone else at any time. No gift tax return is required if the gift is small and within the annual exclusion amount. A gift tax return is required, but tax may or may not be due, if the gift is larger and above the annual exclusion amount.
  • The downside: A gift is a gift is a gift and, once it's gone, you cannot get the money back if you need it.
3. Establishing a living trust.
  • What it is: A living trust is a bridge that allows you to privately move your assets safely across to the next generation, generally without court involvement.
  • How it works: Once you establish the trust, you must put all of your solely owned property into the trust, and name a Successor Trustee. The Trustee is analogous to an Executor and will follow your instructions as to when and how to distribute your assets. The difference is that the Successor Trustee has power per the trust document to do this by himself, whereas the Executor receives his power to distribute from the Court.
  • Caveat: A living trust will not protect your assets for Medicaid purposes, as is commonly believed. A living trust can, however, avoid probate and expedite the transfer of your assets.
  • The downside: A living trust costs more to set up than a Will and requires monitoring during your lifetime to ensure that your assets remain in trust. The goal is not to have any solely owned property outside the trust on the date of your death; failure to put all solely owned assets into the trust will put the estate back into probate.
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