How Can You Avoid Probate When Transferring Real Estate to Heirs?

How Does Probate Work in Mississippi?

When a close family member dies, their heirs must determine what to do with their assets. Unless the decedent planned and had a trust in place, their property, assets, etc., would generally be distributed through a Mississippi court process called probate.

Probate is a formal, court-supervised process used to determine whether the decedent’s will is valid and then to settle the estate.

During this usually long and costly court process, an appointed estate administrator or executor gathers the decedent’s assets, pays off any debts, and finally transfers the decedent’s property to their rightful heirs and beneficiaries. 

During this critical part of the probate process, the advice and guidance of an experienced, compassionate estate planning lawyer are usually invaluable.

Still, many Mississippi families want to avoid the costly probate process for various reasons, and a diligent, well-versed estate planning lawyer can often help achieve this goal. 

Most well-versed and highly trained estate planning lawyers will explain that probate is always a lengthy and expensive process, and it doesn’t always turn out how the decedent would have wanted it to.

Additionally, most estates, especially if they are relatively large and even moderately complex, may take a year or more to go through probate entirely.

Another factor most families want to avoid is that the general public can access most of the information involved in the probate process, so that privacy can be a critical issue.

Therefore, most estate planning lawyers in Mississippi will advise you to avoid probate for assets like real estate, bank accounts, vehicles, etc., by using valuable tools such as a living trust (or numerous other tailored estate planning tools at your lawyer’s disposal).

What Are Just a Few Specific Benefits of Avoiding Probate in Mississippi?

In most cases, if the assets of a deceased family member can be distributed to the intended beneficiaries and heirs without probate, there are usually numerous benefits, for example:

The high costs involved in probate, such as court costs, possibly legal fees, court time, and much more, can amount to five to ten percent of your estate’s total value (and sometimes more).

By using trusts, lifetime gifts, joint ownership strategies, and many other estate planning tools tailored to your needs, the real estate and assets can be passed directly to beneficiaries without incurring these significant added costs. Avoiding probate may also reduce the overall tax burden on high-value estates.

Time is another issue, as Mississippi probate typically takes 6-12 months (and, at times, years) to transfer all the assets to successors completely. The situation can worsen if estate disputes arise, as this period may extend considerably more.

Then there’s the well-known fact that the probate court process is part of the public record. Using a trust or other strategic estate planning tool, your business remains private and confidential, which can be of paramount importance to many families.

What Are Some Sound Legal Ways to Avoid Probate?

Every case differs, as do the circumstances of the deceased estate. However, with the help of an experienced, thorough, and highly skilled estate planning lawyer, legal tools are available that can strategically provide you with the final result you want without going through probate.

Just a few of these tools are:

• Joint ownership – Essentially, this means that the assets are legally owned by two or more individuals together. This can be very useful in transferring real estate. When one of the owners dies, the title automatically passes to the surviving owner through rights of survivorship. Additionally, the Mississippi court is not usually involved in the process of completing it.

The state of Mississippi recognizes joint tenancy with the right of survivorship. This grants equal property ownership to two or more parties and tenancy by the entirety, which is for married couples.

• A Transfer on Death Deed (aka TODD) – This recognized legal document transfers an individual’s interest in real property to one or more designated beneficiaries. This becomes effective at the transferor’s death but does not change the ownership or right to the property until then. Like many other legal tools, however, these strategies must be executed using specific and correct forms to be effective.

Until recently, Mississippi law did not recognize transfer-on-death deeds. However, with the recent passage of specific bills, the Mississippi legislature created statutory guidelines for “Transfer on Death Deeds” in Mississippi.

• Forming a living trust – An additional and highly effective way for families to avoid probate in Mississippi is to create a living trust. By using a well-drafted living trust, you, as the “grantor,” can place assets to be managed by a “trustee” for the benefit of specific and named beneficiaries. Upon the grantor’s death, assets within the trust can be transferred immediately to beneficiaries, totally bypassing the court probate process.

How Can I Specifically Transfer Real Estate Without Going Through Probate?

Once again, every case and estate differs, but using a life estate deed is a very popular way to transfer real estate and avoid the probate process. This strategic type of deed allows the current owner to retain possession of the property for life. However, after the life tenant dies, the property automatically passes to the designated remainderman, who is typically an heir or family member, without going through probate.

The use of a life estate deed does have some positive and negative aspects, though, such as:

Pros:

• The transfer is usually done automatically and avoids probate.
• The life tenant maintains control of the property during their lifetime.
• Property taxes and homestead exemptions still may remain available to the life tenant.

Cons:

• Once the deed is drafted and recorded, the life tenant cannot change the remainderman (or heir)  without their consent.
• The remainderman’s interest could complicate refinancing or selling the property if that is a factor.
• It could also affect Medicaid eligibility, estate recovery, and more.

A revocable living trust is another strategic and powerful estate planning tool that allows you to place real estate into the trust. You manage this trust during your lifetime. But upon your death, a successor trustee distributes the trust assets (including real estate) directly to your heirs without probate.

You must note, however, that a professional estate planning lawyer must manage all estate planning tools if you want to ensure that they are the best tools available to accomplish your financial goals.

I Need More Information on Transferring Real Estate After My Death; How Should I Proceed?

The stress and emotional strain when a loved one dies is draining enough. But then, the prospect of going through a costly, lengthy probate process only makes it worse.

Therefore, avoiding probate is commonly the best option when transferring real estate and other types of assets in Mississippi. It does require careful planning, but the peace of mind and potential time and cost savings can be well worth the effort.

However, ensuring everything is done correctly and complies with Mississippi law is critical, so a seasoned estate planning lawyer’s professional advice, guidance, and knowledge are mandatory.

The Oxford-trained estate planning lawyers at Tannehill Carmean have decades of experience assisting Mississippi families in creating comprehensive, strategic estate plans designed to meet their unique needs. Call them today at 662-236-9996 to discuss your plans and goals; proper professional guidance can make a monumental difference and help your loved ones avoid unnecessary stress after you’re gone.