Minnesota Probate Law | When Trying To Avoid Probate Only Makes Things Worse

When many people sit down to create an estate plan, a common motivating factor is the desire to avoid probate. We’ve said it before and we’ll say it again, probate is a long and cumbersome process that is, usually, good to avoid. It costs money, it wastes time, it can be terrible for small businesses and it’s public, meaning details of your family and estate are available for others to peruse. In short, there are many reasons why your family might benefit from avoiding the inefficiencies of the system.

Though it’s often good to steer clear of the probate process, it is critical that you do so thoughtfully. Working with an attorney to plan out how you want your estate to be managed after you’re gone is wise. Taking shortcuts that could end up causing far more trouble than the probate process itself? Not so much. To learn more about two common probate avoidance shortcuts that you should be aware of, keep reading.

Housing | Minnesota Probate

One of the assets that that people most often worry about is real estate. They want to be sure their home (or second home or rental properties, etc.) doesn’t get tied up in probate court, forcing family members to spend time and money getting it out. To avoid the hassle of probate, some will simply transfer the home to a child while they are still alive. This can be a good thing, in some cases. However, there are a number of serious potential pitfalls.

For one thing, if your child is now the owner of the home, then he or she is able to make decisions about what happens to the property, including if it gets sold. That means you can get cut out of crucial decisions about your home and your future, if the child chooses to do so. Though you may not worry about this risk, understandably willing to trust your child, there are others.

What if your child declares bankruptcy? In that case, your house could be sold off to pay creditors. If, for example, you become ill and need medical assistance under Medicare, you might not be eligible if the transfer occurred around the same time. Another concern is that if your child were to pass away before you, the house would be transferred to his or her heirs, rather than yours.

Banking | Minnesota Probate

Another common approach for probate avoidance is to add a child’s name to your bank account. This can be helpful in that the child is allowed to pay bills on your behalf and automatically becomes an owner of the account in the event of your death. That said, potential problems abound.

Again, if trust is even remotely a concern, this should be avoided at all cost. By becoming an owner of the account, your child could do as he or she wishes, including stealing every last penny. Even if you trust the child totally, harm lurks in the form of creditors or others that your child may owe money to. If your child divorces or is involved in an accident or owes money to creditors, all could result in a judgment seizing your money to satisfy your child’s obligations.

Minnesota Probate Lawyers | Free Initial Consultations

Though many of these risks are speculative, that doesn’t mean they shouldn’t be seriously considered. These kinds of issues occur all the time and should be thought through before moving forward. An experienced Minnesota estate planning lawyer can help walk you through the complicated process of establishing a workable estate plan. For more information on estate planning in Minnesota, along with a variety of other topics, contact Joseph M. Flanders of Flanders Law Firm at (612) 424-0398.

Source: “Shortcuts to avoid probate that can cost more than money,” published at GJSentinel.com.