People in Indiana who are preparing an estate plan might wonder whether it would be a good strategy to try to avoid probate. In some situations, this may be the right choice, but in others, it could be a mistake.
Why avoid probate?
There are a few reasons why avoiding probate may be desirable. The process can be costly and slow, leaving heirs waiting months or, sometimes, even years for their inheritances. It is also public. While other parts of an estate plan can be challenged, there may be less scope for conflict in a more private plan. People who prefer their estate plan to be private might want to use trusts or other vehicles to pass assets to beneficiaries. However, there are costs associated with trusts as well, so it is important to make comparisons. Furthermore, small estates may be exempt from probate. The amount for exemption varies from state to state, but in Indiana, it is for estates worth less than $50,000.
Alternatives to probate
For those who want to avoid probate, it may be possible to pass many assets by transfer on death or beneficiary designations. The latter in fact are how many assets are passed, including life insurance payouts and retirement accounts, and any instructions in the will would be overridden by the beneficiary designation. For assets that cannot be passed in this way, a living trust is another option. It can be changed or canceled by you during your lifetime. A trust can also offer other benefits, such as allowing you more control over when and how assets are distributed.
Bypassing probate is not necessary or desirable for everyone, but it can be an important option for some. Knowing what the alternatives are can be useful in creating an estate plan that best serves you and your loved ones.