I had a really interesting conversation at a meeting yesterday with several individuals employed in different industries. The topic of probate came up along with ways to avoid probate.

Before I go any further, let me start by saying that a lot of us don’t give sufficient attention to estate planning issues. We may have a will and some other documents but we often take the path of least resistance or do the bare minimum which clearly is better than nothing but isn’t necessarily the best option. This is often the result of not knowing any better. Many have experienced or know someone who has experienced acting in the capacity of an executor of a disorderly estate, which included refereeing contention among heirs. Combining the stress of administering an estate with the emotion of losing a loved one and having to manage competing demands along with the emotions of others is not a fun way to remember the passing of a loved one. Unfortunately, this happens all too often.

One of the best gifts you can leave to your heirs is a well thought out and robust estate plan. Let me state very clearly that I am NOT an attorney. I have no legal ability/capacity to draft estate documents. However, because money and other assets are a major part of a person’s estate I have a good working knowledge of the importance of good estate planning and recommend everyone do everything they can to plan properly to not only protect their legacy but to also protect their heirs.

Estate planning has many facets, which I will not go into today. All I want to do today is define probate and to list three ways assets can avoid probate. Please keep in mind there are exceptions to the rules.

Probate is the legal process of validating and executing a deceased person’s will. The Balance defines probate as follows:”Probate is the court-supervised process of authenticating a last will and testament if the deceased made one. It includes locating and determining the value of the person’s assets, paying their final bills and taxes, and distributing the remainder of the estate to their rightful beneficiaries.”

As you can see, the courts get involved and often times attorneys, sheriffs and other professionals have to be involved as well. Probate can be lengthy and costly. While probate isn’t the worst case scenario, avoiding probate is the best strategy, in my opinion. There are three primary ways you can avoid probate.

First, you can own assets as joint tenants with rights of survivorship (JTWROS). Such an ownership structure would automatically transfer ownership to the surviving owner of a property, for example. Married couples are probably the biggest users of this ownership structure. However, a parent and child or two unrelated individuals can own property in this type of ownership structure.

The second way to avoid probate is to designate beneficiaries. Retirement accounts are an example of an asset where the owner can designate a beneficiary. When the owner of the account passes on, the beneficiary is awarded ownership of the account without the asset having to pass through probate.

The third way to avoid probate is via a trust. Trusts often are viewed as only for wealthy people but they are an efficient way for anybody to transfer assets to their loved ones. By establishing a trust and contributing assets to the trust, upon the grantor’s passing the beneficiaries are awarded the trust assets per the instructions established by the grantor. A trustee manages the affairs, including the disbursement of assets, of the trust to ensure the grantor’s instructions are properly followed. Trusts come in many flavors and can be complicated which might scare many people off. However, trusts can be simple, reasonably priced, and worth the cost and effort for the benefits they provide to both the grantor and beneficiaries.