How to Avoid Probate Fees in Massachusetts

Probate can be a lengthy and costly process that many individuals wish to avoid when managing the distribution of their estate. In Massachusetts, avoiding probate fees is a matter of strategic planning. Here are some effective strategies to help you bypass probate fees:

1. Establish a Living Trust

A living trust is one of the best methods to avoid probate. When you create a living trust, you transfer your assets into the trust while you are still alive. Upon your death, the assets in the trust can be distributed to your beneficiaries without going through probate, thus saving time and money.

2. Utilize Joint Ownership

Holding property jointly with another person can also help you avoid probate. In Massachusetts, owning property as joint tenants with rights of survivorship ensures that the surviving owner automatically inherits the property upon the death of the other owner, bypassing probate.

3. Designate Beneficiary Accounts

For financial accounts such as bank accounts and retirement accounts, you can designate beneficiaries. This is done by filling out a beneficiary designation form with your bank or financial institution. Upon your death, these accounts will transfer directly to the named beneficiaries, avoiding probate fees.

4. Gifts to Family Members

One way to reduce the size of your estate and avoid probate is by giving gifts to family members while you are alive. In Massachusetts, you can give up to $16,000 per year (as of 2022) to each individual without incurring a gift tax. These gifts are removed from your estate, thus decreasing the probate fees.

5. Employ Payable-on-Death (POD) Designations

POD accounts allow you to name a beneficiary for your bank accounts who will receive the funds upon your death. This method ensures that the assets go straight to the beneficiary, avoiding the probate process entirely.

6. Create a Transfer-on-Death Deed

Massachusetts allows property owners to use a transfer-on-death (TOD) deed. This means that you can transfer real estate to a beneficiary upon your death without the property going through probate. To be valid, the deed must be recorded before your death.

7. Review Your Will Regularly

It’s important to keep your will up-to-date, reflecting any changes in your financial situation or family dynamics. Having an appropriate and current will can minimize disputes and potential probate fees should your estate have to enter the probate process.

Conclusion

By employing these strategies, you can effectively avoid probate fees in Massachusetts. It’s wise to consult with an estate planning attorney to ensure all aspects of your estate are managed properly and according to your wishes.