One of the most frequent questions that estate planners get is, “How do I avoid probate?” There are plenty of estate planning strategies for avoiding probate. For example, trust assets can be distributed outside of probate. Another method of keeping property intact without going through probate is through joint ownership. Because ownership automatically transfers upon one owner’s death, the asset is now someone else’s, making it ineligible for distribution.
What is Probate?
Probate is the legal process of distributing a person’s assets and property after his or her death. If there is a will, it is reviewed and validated by the court before assets are distributed according to the will; if no will is present, assets are distributed according to Missouri law. Some assets may be excluded from the probate process, which speeds up the transfer of the assets to the beneficiaries. An executor or administrator is a neutral person assigned to oversee the distribution of the assets, including paying debts
What is Joint Ownership?
Joint ownership is when two or more people share ownership of a property, asset, or business. In Missouri, there are two types of joint ownership: joint tenancy and tenancy by the entirety. Different types of ownership apply to different types of assets and can depend on the relationship of the owners. Joint ownership can be held between married couples, family members, business partners, or even friends who have partial ownership of a certain property or asset.
Joint Tenancy
Joint tenancy is one way that joint owners of a property avoid probate. In order for a jointly owned property or other asset to avoid probate in Missouri, it must include the right to survivorship. That means that, if one owner dies, the property is passed to the other owner or owners without the need to go through probate court.
Tenancy By the Entirety
Tenancy by the entirety is typically used for married couples and applies to both property and financial assets. Like joint tenancy, if an asset is considered tenancy by the entirety, it passes to the surviving spouse automatically. Tenancy by the entirety protects assets not only from probate, but also from creditors who may try to claim part of the asset after one owner dies.
Why Avoid Probate?
There are many reasons for planning an estate’s distribution that keep the assets out of probate.
- Probate Takes Time – Even with a will to streamline the process, probate can often be lengthy and time-consuming. Timelines for probate in Missouri can range from a few months to several years depending on the size and complexity of the estate.
- Probate is Public – All assets that go through probate are public record. For some, keeping assets and properties private is a necessity, so avoiding probate maintains that privacy.
- Probate Can be Costly – Court fees and other expenses can diminish the value of the estate, especially for complex or contested estates.
- Probate Can Cause Conflict – In some cases, probate can cause rifts among family members and friends of the deceased. The stress alone can put a strain on family relationships, and other times, disputes about the asset distribution can cause major family problems.
Avoiding Probate with Estate Planning Strategies
If keeping your assets and property away from probate is your goal, you could benefit from speaking with an estate planning professional. Joint ownership is just one of many strategies that can be used to accomplish your estate planning goals and preserve your legacy. At Mark Harford Law, we create customized estate plans for each client through a combination of different documents and strategies. If you’re ready to begin estate planning or need to update your current plan, contact the Mark Harford Law team to schedule a free consultation.