How To Avoid Probate in Pennsylvania
Probate Info
For many Pennsylvania families, the thought of going through probate after a loved one’s death can feel overwhelming. The complexity of probate, working with an executor, filing inheritance taxes, and handling the estate’s debts can make this process even more stressful. While probate provides structure and oversight, it can also be time-consuming, expensive, and stressful for grieving families.
The good news is that, with proper planning, your estate can be structured to avoid probate. For more information on how to avoid the probate process and ensure your family’s financial security, reach out to the skilled probate attorneys at the Clause Legal Group today.
Why Is It Better To Avoid Probate?
Probate isn’t inherently a bad thing. It ensures debts are paid and property passes legally to the beneficiaries, so there are no future debts or ownership disputes. However, there are also many reasons why you may want to avoid the probate process in Pennsylvania as much as possible.
- Time: Probate often takes between nine months and two years to completely wrap up, which means your loved ones can’t access some or all of these assets while the estate works its way through the process.
- Cost: Probate can involve court fees, executor commissions, attorney fees, and accounting costs. All of these expenses eat into the amount you’ll eventually receive from the estate.
- Privacy: Probate is a public process, so wills and estate records are generally available to the public once the will has been filed..
- Stress: The process can be confusing and burdensome for surviving family members, making an already stressful experience more difficult to bear.
By minimizing probate, you make life easier for your heirs and ensure your estate is transferred more quickly and efficiently. Through estate planning and the help of a top-rated probate attorney, you can change titles, designate beneficiaries, and structure your estate in a way that reduces or eliminates the amount of time your assets have to spend in probate.
How To Avoid Probate in Pennsylvania
You can avoid the amount of time your estate spends in probate through advance planning. From joint ownership to trust, the following estate planning tools can help you avoid much of the probate process in PA.
1. Joint Ownership of Property
One way to skip probate for an asset is by adding a joint owner with rights of survivorship to real estate properties or other accounts. By doing this, you can ensure that property transfers automatically at death without requiring probate.
2. Beneficiary Designations
Designating beneficiaries on life insurance, retirement accounts, and even certain bank accounts allows those assets to transfer directly to the person you choose. It’s important to review and update beneficiaries regularly. For example, you will likely want to review the account’s beneficiaries after a marriage, divorce, the birth of a child, or other major life events.
3. Transfer-on-Death (TOD) and Payable-on-Death (POD) Designations
Pennsylvania allows TOD or POD designations on certain accounts. These allow the funds to transfer directly to beneficiaries outside of probate. For instance, these designations are common with life insurance plans.
4. Revocable Living Trusts
One of the most effective ways to avoid probate is by creating a revocable living trust. With this option, you transfer ownership of your property to the trust during your lifetime and continue to manage it as the trustee. After your death, your successor trustee distributes assets according to your instructions without probate court involvement. These living trusts can be set up with the help of your attorney, ensuring much of your estate can skip probate.
5. Small Estate Procedures
Is the non-real estate part of your estate worth less than $50,000? In that case, 20 Pa.C.S. § 3102 allows you to use a simplified process known as a small estate petition. If approved, the assets can be transferred without requiring full probate.
Important Assets That Avoid the Probate Process Entirely
If you’re concerned about the time-consuming, costly nature of probate, keep in mind that not all property is subject to this procedural requirement. Some assets pass directly to new owners by law or by contract. The following are examples of asset types that generally don’t have to go through probate.
- Jointly owned property with rights of survivorship
- Property held as tenancy by the entirety (only available for married couples)
- Life insurance policies
- Retirement accounts
- Bank or investment accounts with POD or TOD designations
- Assets held in a revocable living trust
However, avoiding probate doesn’t mean these assets aren’t going to be taxed. Under 72 P.S. § 9101, your assets are likely subject to Pennsylvania’s inheritance tax.
How a Pennsylvania Estate Planning Lawyer Can Help
While some probate-avoidance tools may seem simple, mistakes can be costly. Forgetting to update your beneficiary designation could mean that assets go to your ex-spouse. Similarly, not thinking about inheritance taxes can impact the size of the tax burden your heirs have to face. By working with an experienced Pennsylvania estate planning and probate lawyer, you can review your estate, restructure assets, account for inheritance taxes, create a trust, and update beneficiary designations.
At the Clause Law Group, we help clients who are located in Wayne, Pike, Monroe, Lackawanna, and Luzerne Counties. Reach out to our experienced legal team today to find out more information.
