Probate can be a lengthy, expensive, and stressful process for your loved ones after your death. You may want to consider strategies to avoid probate and ensure your assets are distributed quickly and efficiently. Probate Attorney Paul Holland helps clients structure their estate plans to avoid probate in Connecticut. While Connecticut’s probate laws differ from those of many other states, avoiding probate can still reduce legal fees, speed up asset distribution, and reduce stress for your heirs.
What Is Probate?
Probate is the legal process of administering a deceased person’s estate. In Connecticut, this involves the Probate Court overseeing the implementation of the decedent’s Will and ensuring that all assets are distributed to the rightful beneficiaries. If there is no Will, the court is forced to follow state’s intestacy laws to determine who inherits the estate.
In Connecticut, probate is required for any estate with assets exceeding $40,000 unless the assets pass directly to beneficiaries through other legal means. While probate is a necessary part of estate administration, there are ways to structure your assets to bypass the probate process altogether.
Why Should You Avoid Probate in Connecticut?
While avoiding probate in Connecticut won’t reduce probate court fees—since these fees are based on the total value of the estate, not just the assets subject to probate—there are still significant advantages to avoiding probate:
- Faster Distribution of Assets: By avoiding probate, your heirs can receive their inheritance much quicker, as they do not need to wait for the court process to finalize.
- Reduced Legal Fees: Probate can involve extensive legal work and filings, which can be costly. Avoiding probate minimizes the legal fees associated with settling an estate.
- Privacy: Probate is a public process, meaning the details of your estate, including assets and debts, become part of the public record. In contrast, certain probate-avoidance tools, such as Revocable Trusts, allow for the private administration of your estate.
Strategies for Avoiding Probate in Connecticut
Here are several strategies to avoid probate in Connecticut that Holland Law Offices can help you implement.
1. Create a Revocable Trust
A Revocable Trust is one of the most effective tools for avoiding probate explains The American College of Trust and Estate Counsel. After you create a Revocable Trust, you can transfer ownership of your assets into the trust, and retain control over them during your lifetime as the Trustee. Upon your death, the successor Trustee you designate will manage and distribute the assets according to your wishes, without the need for probate.
The flexibility of a Revocable Trust allows you to modify or revoke it at any time during your life. However, it’s important to remember that while a Revocable Trust avoids probate, it does not protect assets from creditors or estate taxes.
Creating a trust with the guidance of a knowledgeable probate attorney, such as Paul Holland, ensures that the trust is properly funded and meets your estate planning goals.
2. Own Property Jointly with Another Person
Another way to avoid probate is by owning property jointly with another person. When property is held as joint tenants with the right of survivorship, the surviving owner automatically inherits the deceased owner’s share of the property without it going through probate. For married individuals, this technique can be used with real estate, bank accounts, and taxable investment accounts.
While joint ownership can simplify asset transfer, it has potential risks. If there is a falling out between joint owners or if one owner faces legal issues like bankruptcy or divorce, it can complicate the ownership structure. Joint ownership may also create unintended consequences, such as the surviving owner inheriting the entire asset when you intended for multiple beneficiaries to share it. That is why this technique is generally used only by married individuals and not widows or widowers.
3. Use Pay-on-Death (POD) and Transfer-on-Death (TOD) Designations
Many banks and financial institutions offer Pay-on-Death (POD) or Transfer-on-Death (TOD) designations for accounts such as checking, savings, and brokerage accounts. These designations allow you to name a beneficiary who will automatically inherit the account upon your death, bypassing probate.
To set up POD or TOD designations, you must provide the necessary forms to your financial institution and specify your beneficiaries. It’s essential to keep these designations up to date, especially if your family situation changes, to ensure the correct beneficiaries inherit the assets.
4. Designate Beneficiaries for Retirement Accounts and Life Insurance Policies
One of the simplest ways to avoid probate is to ensure your retirement accounts (e.g., IRAs and 401(k)s) and life insurance policies have valid beneficiary designations. By doing so, these assets will transfer directly to the beneficiaries upon your death, without the need for probate.
It’s important to regularly review and update your beneficiary designations to reflect any changes in your life, such as marriage, divorce, or the birth of a child as well as any changes in the tax law. Failing to update these designations could result in unintended beneficiaries receiving your assets or payment of unnecessary taxes.
Connecticut-Specific Considerations for Avoiding Probate
Although avoiding probate in Connecticut will not reduce the probate court fees, there are still benefits. As previously mentioned, avoiding probate can reduce legal fees and ensure faster distribution of assets to your beneficiaries. Additionally, in Connecticut, even if you avoid probate, you may still be subject to estate taxes if your estate exceeds the state and federal exemption threshold of $13.61 million in 2024.
An experienced Stonington probate attorney like Paul Holland can help you develop strategies to reduce your estate tax liability and ensure that your estate is structured in a way that benefits your heirs.
Is Avoiding Probate Right for You?
While avoiding probate can benefit many individuals, it may not be the best option for everyone. The decision depends on your unique financial situation, the complexity of your assets, and your goals for your estate. An experienced Stonington probate attorney can guide you through the options and help you create a plan tailored to your needs.
At Holland Law Offices, we understand the intricacies of Connecticut probate law and can help you develop a strategy to avoid probate, reduce legal fees, and ensure your assets are distributed according to your wishes. Whether you are just beginning to consider estate planning or you need to update an existing plan, we are here to assist you.
Request a Consultation with Holland Law Offices
If you are looking for experienced advice on how to avoid probate and protect your assets in Stonington, CT, request a consultation with Probate Attorney Paul Holland. We will work with you to create a personalized estate plan that meets your needs and provides peace of mind for you and your loved ones.
