As a leading estate planning law firm serving Long Island, New York, we receive a range of questions regarding the probate process at Davidov Law Group. Most commonly, these questions center around whether or not it is possible to avoid probate in New York and, if so, how to structure an estate plan to successfully avoid probate. These two frequently asked questions are addressed in the following resource.
Can I Avoid Probate in New York?
Considering that probate is a long, difficult, and highly complicated legal proceeding, it is unsurprisingly that many people take steps to avoid the process. Fortunately, it is possible to avoid probate in New York if you carefully structure your estate plan for this purpose. Each state has its own set of laws that specify how the probate process works and which assets are required to go through probate.
Typically, if an asset is owned solely by the deceased person and has not been assigned a beneficiary designation, it is likely to go through probate. Some of the most common assets that go through probate include:
- Real estate. If the deceased person is listed as the sole owner of a real estate deed or house, their property will go through probate to address any remaining liens or taxes. Then, the property will be passed down to the beneficiary. If the real estate is owned by more than one person, however, and includes a right of survivorship, probate may not be necessary.
- Personal belongings. All personal property, such as furniture, automobiles, clothing, art, and jewelry, for example, must be included in probate. There may be exceptions if these personal assets were placed in a testamentary instrument before the person’s death.
- Bank accounts. Unless a person names a beneficiary for their checking or savings accounts, these assets will go through probate.
Not all assets are legally required to go through probate. Fortunately, avoiding the probate process is possible if a person’s estate plan is properly structured before their death. The following are considered exempt from probate:
- Assets placed in trusts
- Proceeds from life insurance policies
- Assets kept in account with Payable on Death or Transfer on Death designations
- Retirement accounts with properly designated beneficiaries
- Certain jointly owned assets
- Wages, salaries, or commissions, up to a certain value
Most states, including New York, offer an expedited probate process for small estates. In New York State, if a person leaves behind personal property that is less than $50,000 in value, it is considered a small estate. In these cases, the estate can be administered by a voluntary administrator. This streamlines the distribution process and avoids probate. For the majority of Long Island residents, however, voluntary administration is not applicable. Therefore, if you have assets valued at over $50,000, including real estate and other property, it may be necessary to use probate to distribute these assets.
Are Trusts Exempt from Probate?
When structuring an estate plan to avoid probate, trusts are one of the most valuable resources. Assets that are placed in a trust, such as a revocable living trust, are able to avoid probate altogether. A revocable living trust is one that can be managed by the person who creates the trust during their lifetime. It is used to name beneficiaries of assets and property following the person’s death.
The purpose of a trust is ensuring that all assets and property are passed down to specified heirs after a person’s death. With a revocable living trust, the trust becomes the owner of the estate, allowing the assets placed within to avoid probate entirely. Since you do not own any of the assets held within the trust, the assets are able to go directly to heirs.
If a trust is not set up properly, however, probate may still be necessary. Ensuring the proper transfer of ownership from the trust maker to the trust is essential. If assets are not correctly transferred to the trust or the estate plan is not regularly updated, the trust may not be exempt from probate. Therefore, selecting an experienced estate planning attorney to create and manage your trust is key.
Contact Davidov Law Group Today
New York State law provides opportunities for individuals to avoid probate using strategic estate planning tools. To capitalize on these opportunities, it is necessary to plan in advance and set up an estate plan that is effective and works for your specific assets and property. At Davidov Law Group, we work closely with our clients to leverage estate planning tools to avoid probate, ensuring that their heirs receive their inheritance quickly and efficiently. To learn more about how we can help, consider contacting our office at 516-908-8689 today.
