Estate planning lets you establish how to distribute your assets after your death. Assets typically transfer through probate, which can be a lengthy and costly process. Understanding how to plan for the distribution of assets outside of probate can reduce legal issues for your loved ones when you are gone.
Harris Law Firm provides tailored estate planning services to help individuals achieve peace of mind. With over three decades of experience, our team works closely with clients to design an estate plan that accounts for their unique needs and meets their goals.
Our Mississippi probate attorneys have deep roots in Mississippi, allowing us to understand the unique needs of our community. Whether you need help avoiding probate or have concerns about distributing your assets, we are here to guide you.
What Is Probate?
The process of administering a deceased person’s estate, known as probate, involves:
- Determining whether a valid will exists,
- Notifying interested parties about the administration,
- Inventorying assets and debts,
- Paying debts and taxes, and
- Distributing the remaining assets.
While probate may be necessary, it can be time-consuming and expensive, and many people look for ways to avoid it.
What Are Probate and Non-Probate Assets?
Assets are either probate or non-probate. Probate assets must go through the probate process to transfer to a new owner. Common probate assets include:
- Individual bank accounts,
- Real estate,
- Intellectual property, and
- Other investment assets.
Non-probate assets do not require probate—they can pass directly to their beneficiaries without the beneficiaries going to court. Common non-probate assets include:
- Trusts,
- Property with a transfer on death (TOD) provision,
- Shared financial accounts, and
- Beneficiary designations in life insurance and retirement accounts.
Often, you can transfer probate assets into a trust to transform them into non-probate assets.
Avoiding Probate Distribution of Assets
Several effective ways exist to avoid probate distribution of assets. Many individuals combine these strategies with their will to create a detailed, efficient estate plan.
Trusts
A trust allows the trust’s creator (“grantor”) to transfer assets into a separate legal entity with specific terms. One of the most common methods of avoiding probate is creating a revocable living trust, where the grantor selects a trustee to manage and distribute assets after the grantor’s death but retains control over the assets during their life.
Trusts are versatile, adaptable tools that enable you to exercise more nuanced control over what happens to your assets while providing for your loved ones. Through trusts, you can, among other things:
- Provide for a disabled loved one without jeopardizing their disability benefits;
- Create a financial safety net for young or financially irresponsible loved ones;
- Protect your assets while qualifying for Medicaid long-term-care coverage; and
- Support a charitable cause.
Trusts can also offer privacy—a trust’s distribution of assets is not public like probate.
Beneficiary Designations
Certain accounts allow individuals to designate beneficiaries, like:
- Life insurance policies;
- Payable-on-death (POD) bank accounts;
- Pensions, IRAs, 401(k)s, and other retirement accounts; and
- Similar benefit plans.
By naming a beneficiary, you declare you want the asset to pass directly upon your death without probate. Ensure you regularly update beneficiary designations. If your designated beneficiary cannot accept the benefits, for example, because they died before you, the benefits may be forced through probate instead.
Gifting Assets
Another strategy for avoiding probate is gifting assets to loved ones during your lifetime. Mississippi law allows individuals to gift property and assets without tax as long as the value of the gift does not exceed certain limits.
If you hope to qualify for Medicaid, be careful using the gifting strategy. To qualify for Medicaid, you can only own limited assets. When deciding whether you are eligible, the government considers all asset transfers you made during a five-year look-back period. It counts gifts you made within those five years as part of your current assets, potentially disqualifying you from coverage.
The Importance of Estate Planning
An ineffective or improper estate plan can result in significant legal disputes, risking family conflict, delays in asset transfer, and high costs. A comprehensive, efficient estate plan that strategically avoids or embraces probate when logical to do so allows you to prevent many conflicts before they arise.
At Harris Law Firm, we provide tailored estate planning services to help Mississippi residents protect their legacies and reduce the likelihood of disputes after death. Our attorneys will work with you to understand your estate, family dynamics, and long-term objectives. We focus on creating a plan that will simplify the distribution of assets and avoid complications for your loved ones.
Why Harris Law Firm?
Harris Law Firm has been serving the people of Mississippi since 1981. Our attorneys bring extensive legal experience, knowledge about Mississippi estate laws, and dedication to helping our clients plan their estates efficiently and effectively.
Estate planning is about protecting your legacy and providing for your family after you are gone. If you are looking to minimize the necessity of probate, contact Harris Law Firm today.
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