Navigating the intricacies of estate planning can be overwhelming, especially when one encounters the term “probate.” For residents in Mississippi, understanding what probate is and, more importantly, how to avoid it, can make a substantial difference in ensuring a smooth transition of assets to heirs.
Probate is the legal process that takes place after someone dies. It involves the validation of the deceased person’s will, the appraisal of their assets, the payment of debts and taxes, and the distribution of their assets according to the will (or, if there’s no will, as per Mississippi state law).
Why Does Probate Occur?
Probate serves several purposes:
- Verification of the Will: It ensures the deceased’s will, if there is one, is genuine.
- Protection: It’s designed to protect creditors and beneficiaries to make sure debts are paid, and the remaining assets are distributed correctly.
- Transparency: It provides a forum for relatives to object (contest) a will.
- Distribution: If no will exists, probate court decides who inherits based on Mississippi’s laws of intestacy.
While these are genuine reasons to undergo probate, many find the process time-consuming, expensive, and public (probate records are public records).
Strategies to Avoid Probate
While completely avoiding probate can be challenging, you can employ certain strategies to minimize the number of assets going through this process.
- Revocable Living Trusts: One of the most common tools used to avoid probate is establishing a revocable living trust. Unlike wills, trusts aren’t subject to probate. When you create a trust, you transfer ownership of your assets to the trust. While you’re alive, you act as the trustee, maintaining complete control over your assets. Upon your passing, the person or entity you named as your successor trustee takes control and distributes the assets according to the trust’s terms, bypassing probate.
- Joint Ownership: Owning property jointly with someone else can avoid probate. In Mississippi, when one joint owner dies, the surviving owner automatically gets the deceased owner’s share.
- Beneficiary Designations: Many assets allow you to name a beneficiary. Upon your death, these assets will pass directly to your designated beneficiary without probate. Typical assets with beneficiary designations include retirement accounts, life insurance policies, Payable on Death (POD) bank accounts, and Transfer on Death (TOD) securities and brokerage accounts.
- Gifts: Giving away property while you’re alive helps reduce the value of your estate, which can be especially beneficial if your estate nears the federal estate tax exemption limit.
- Small Estates Procedures: Mississippi law allows heirs to skip probate if the estate is below a certain threshold. This “small estate” threshold might change, so always consult with a legal professional for the latest information.
- Utilize Homestead Exemption: In Mississippi, if a decedent leaves a surviving spouse or minor children, they can claim a homestead exemption for the family home, which can reduce or eliminate probate for this asset.
While probate can provide a structured way to deal with an estate after someone’s death, many prefer to avoid or limit the process because of its costs and public nature. By understanding what probate entails and employing smart estate planning strategies, you can ensure a more direct and private transfer of assets to your loved ones.
Planning an estate involves many moving parts and considering current laws and regulations. If you want to set up your estate to avoid probate efficiently, or if you have more questions about this process, don’t hesitate to reach out. Contact our expert legal team at Lancaster Law Firm today and ensure peace of mind for you and your family’s future.