Strategies to Avoid Probate in Pennsylvania
With the right estate planning strategies, you can potentially avoid probate in Pennsylvania. However, each situation is slightly different, and online research may not provide personalized information based on your unique circumstances. Some probate avoidance strategies may not be effective for some, and you should consider discussing the various options with an experienced estate planning attorney in Pennsylvania. That being said, here are a few ideas on how to avoid probate in Pennsylvania:
Consider Beneficiary Designations
One of the simplest ways to avoid probate is with beneficiary designations. This strategy involves “assigning” beneficiaries to specific assets. The process is relatively simple, and it means that your chosen beneficiaries will inherit their assets immediately after your passing. This inheritance process bypasses probate, and beneficiary designations are popular among all kinds of families in Pennsylvania.
Although you can use beneficiary designations for many types of assets, they generally involve financial accounts like 401(k)s, bank accounts, retirement accounts, and brokerage accounts.
Trusts Bypass Probate in Pennsylvania
Another obvious probate avoidance method is a trust. When you establish a trust, you create a separate legal entity that falls outside your personal estate. As a result, your trust is not subject to probate in the same way as your personal estate. When you pass away, your beneficiaries can inherit trust assets immediately.
There are many different types of trusts to choose from. Some trusts can provide income while you are still alive, while others are designed to meet the unique needs of your beneficiaries. Spendthrift trusts are common, and these trusts distribute a portion of total assets on a gradual basis, ensuring your beneficiaries do not spend their inheritance irresponsibly.
If you want to set up a trust to avoid probate, you should consider the costs involved. For some families, these costs outweigh the potential benefits of a trust. For this reason, trusts are generally best suited to middle-to-high-income families. A pour-over Will is a common addition to a trust, and this estate planning tool automatically shifts remaining personal assets into a trust when you pass away.
Another potential issue is the potential loss of the “step-up in basis” for your beneficiaries if they inherit assets from an irrevocable trust. This could result in capital gains issues, and this is something you might want to discuss with your lawyer.
Consider Gifts
Some probate avoidance strategies can occur before you pass away, and gifts represent a clear example. The current federal gift exemption is quite high, and you can give assets to your beneficiaries while minimizing tax obligations. Many seniors appreciate lifetime gifting strategies, and they allow you to witness your loved ones enjoying their inheritance before you pass away.
Can an Estate Planning Attorney in Hershey Help Me Avoid Probate?
An estate planning lawyer in Hershey may be able to help you avoid probate. Although online research can help you learn about certain probate avoidance strategies, the next step is to meet with a lawyer and discuss your family’s unique circumstances. With a greater understanding of your situation, Audi Law PLLC may be able to help you avoid probate. Contact us today to learn more.