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Debate Avoidance Methods

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When planning your estate, you may want to consider a strategy that will avoid probate. The probate process is time consuming, expensive, and at times, contentious. So, to save money and spare your loved ones from the hassles of probate, plan to avoid probate. Probate avoidance methods are state specific. Therefore, when planning your estate, understand that some property may have to go through probate if not protected by a trust. In the book 8 Ways to Avoid Probate by Nolo (2016), Nolo provides, in detail, the common probate avoidance methods and the states in which these methods are available. Probate Avoidance Methods Provided by Nolo: The following is an overview of the probate avoidance methods provided by Nolo: 1) Set up payable-on-death bank accounts – This type of bank account allows you to add beneficiaries to your account. When you die, the account…show more content…
You can give up to $14,000.00 to each individual. If you exceed $14,000 to any individual, filing a gift tax return is required. Read more about gift taxes in the article The Estate Tax and the Gift Tax: The Impact on your Estate. 9) A complimentary method is to take advantage of special procedures for small estates – If you are able to move enough property from your estate at the time of your death, you may achieve small estate status for your state. Some states have special procedures to transfer property in estates worth very little. In general, if the property that has to go through probate is worth little, then the state may waive probate in favor of an affidavit to transfer property. The above methods are great for avoiding probate, but the above methods also reduce exposure to the estate income tax. The more property you move to your beneficiaries the less property available to earn income for the estate after death. So, avoiding probate not only saves on expenses and hassles, it will also reduce the tax exposure for the
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