When you pass on, your assets will be distributed to your loved ones as per your will. However, if you die without one, then your estate will be distributed according to North Dakota intestacy laws. This formal process of administering the decedent’s estate and distributing their assets to the beneficiaries is known as probate.
However, probate can be a time and resource-intensive process. Fortunately, you can take a couple of steps to reduce or eliminate probate altogether. Here are some of these steps:
Put assets in a joint ownership arrangement
Assets that are jointly owned cannot be included in the will and, thus, do not have to go through probate. Such assets are automatically passed on to the surviving owner upon your demise. This arrangement is known as joint tenancy with the right of survivorship. Some of the assets that you can place under joint tenancy include personal checking and savings accounts, investment assets, movable assets and business accounts.
Set up trusts
Assets that are held in a trust are governed by the terms of the trust instrument. Just like jointly owned assets, assets in a trust do not go through probate. Instead, they automatically pass on to the designated beneficiary as specified in the trust instrument.
Give away some assets
This might seem like the most straightforward solution to avoiding probate. However, it is important that you are aware of the consequences that come with giving away your assets. For instance, giving out your assets also means that you will be giving up your control over them. It is also important that you understand the tax implications for both you and the recipient.
Probate can substantially reduce the amount of inheritance available to pass on to your beneficiaries. Find out how you can create an estate plan that minimizes the cost of probate.