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The probating of a Will permits a court of law to supervise the transfer
of assets from the decedent to his heirs. A typical probate lasts about
one year, with six months generally being a minimum time if everything
proceeds according to schedule.
Because of the expense of attorney's fees, executor's commissions, court
costs and the time delay, many people attempt to avoid probate
administration. Some of the methods used to avoid probate are described
here:
Joint Tenancy
This is a form of title arrangement, usually between spouses. The title
of the property passes automatically to the surviving joint tenant.
There may be income tax disadvantages to this arrangement and the joint
tenancy must be dissolved after one tenant dies. Creditors of either
joint tenant can attach the asset. It may also frustrate tax savings
which are anticipated from carefully drafted Wills and Trusts.
Totten Trust
This is a way to pass savings accounts to heirs. Passbook accounts are
held in Trust for another. Typical wording would be: "Alice Jones,
in Trust for Michael Jones, Jr."
Life Insurance
The proceeds of life insurance are rarely subject to probate
administration, unless the insured's estate is the beneficiary or all of
the named beneficiaries pre-decease the insured.
Lifetime Gifts
Even gifts made shortly prior to death will avoid probate. However, they
may be brought back into the estate for death tax purposes. Also, gifts
carry the donor's basis to the donee, whereas appreciated assets in the
decedent's estate will generally get a new or stepped-up basis.
Revocable Living Trust
In many situations, the Revocable Living Trust is an effective method of
avoiding probate. It has the additional advantages of providing
management of the funds for the heirs for some time after the decedent's
demise. Also, in the event the person setting up the Living Trust (also
called an Inter-Vivos Trust) becomes mentally incompetent or otherwise
incapacitated, the Successor Trustee can take over management of the
estate.
 
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