How to Avoid Probate in Alaska

When someone passes away, their assets may go through probate, which is the court-supervised procedure of validating a will, paying off debts, and distributing assets.

In Alaska, as in other states, many people seek ways to avoid this process in order to save their families time and money. 

Avoiding probate can also help maintain privacy, as probate records are public, revealing information about the estate and its beneficiaries. While it may not be possible to avoid probate entirely in all cases, there are several strategies that can minimize or eliminate its involvement. The Law Office of Justin S. Eppler, LLT can help explain common ways to avoid probate.

Probate in Alaska

Before discussing methods to avoid probate, it’s important to understand how it works in Alaska. In this state, probate is necessary when a person passes away and leaves assets that are titled in their name only, with no direct beneficiaries or transfer instructions. 

The probate process begins after death and continues until the court validates the will, if there is one, and distributes the deceased’s assets. It can take months or even years to complete, depending on the intricacy of the estate and any disputes that arise. In Alaska, probate generally happens when:

• There’s no trust in place.

• Assets are owned solely in the deceased’s name without named beneficiaries or transfer instructions.

• Real property is involved.

While the process is designed to make sure that the decedent’s debts are paid and assets are distributed according to their will (or state laws if there is no will), it can be an overwhelming experience for the loved ones left behind. This is why many Alaskans look for ways to avoid probate or reduce its impact.

Use of a Revocable Living Trust

One of the most common ways to avoid probate is by creating a revocable living trust. A trust is a legal entity where a trustee manages the decedent’s assets on behalf of beneficiaries. The key advantage of a revocable living trust is that assets placed in the trust pass directly to beneficiaries without going through probate.

In Alaska, as in many states, a revocable living trust can be amended during the grantor’s lifetime, which gives the person who creates the trust flexibility. This type of trust is “revocable” because the grantor can change the terms or even revoke it entirely. 

When the grantor passes away, the trust is typically administered by a successor trustee according to the instructions outlined in the trust document, bypassing the probate process.

For this strategy to work effectively, assets must be titled in the name of the trust. This means that real estate, bank accounts, and other valuable assets must be transferred to the trust while the grantor is still alive. If assets aren’t properly titled in the name of the trust, they may still have to go through probate.

Beneficiary Designations on Accounts

Another effective way to avoid probate in Alaska is to use beneficiary designations. Many financial assets, such as life insurance policies, retirement accounts (IRAs, 401(k)s), and bank accounts, allow the owner to designate a beneficiary. 

Upon death, these assets pass directly to the named beneficiary without going through probate. This can be an especially useful tool for people who have a number of financial accounts. It’s important to keep beneficiary designations up to date, as they override instructions in a will. 

For instance, if a person names a child as a beneficiary on their life insurance policy, and later changes their mind but forgets to update the beneficiary designation, the original child will receive the policy proceeds. Therefore, reviewing and updating beneficiary designations is an essential step in avoiding probate.

However, there are limits to what beneficiary designations can cover. For instance, they cannot transfer ownership of real estate or other assets not linked to a financial institution. Therefore, relying solely on beneficiary designations may not be enough to avoid probate in all situations.

Joint Ownership of Property

In Alaska, joint ownership of property is another strategy that can help bypass probate. When two or more people co-own property as joint tenants with right of survivorship (JTWROS), the surviving co-owner automatically inherits the property upon the death of the other co-owner, without the need for probate. 

This form of joint ownership is common for spouses, but it can also be used for other relationships, such as between siblings or business partners. Real estate, bank accounts, and other assets can be held jointly. It’s important to note, however, that this arrangement can have consequences. 

For instance, if one of the joint owners has outstanding debts or liabilities, those debts could affect the property upon the other’s death. Additionally, joint ownership may lead to unintended tax consequences, as the property’s value is included in the estate of the surviving owner.

Joint ownership is a straightforward method to avoid probate, but it’s essential to carefully consider whether this is the right option for your situation. It’s particularly useful when the goal is to pass assets directly to a spouse or trusted family member. However, it may not be suitable for more unique family situations.

Transfer-on-Death Deeds for Real Estate

Alaska, like many states, allows the use of a Transfer-on-Death (TOD) deed for real estate. This tool allows an individual to transfer their real property to a designated beneficiary upon death without probate. 

A TOD deed is relatively simple to create and doesn’t require the property to go through the probate process. As with other strategies, the property must be titled in the individual’s name at the time of death, and the TOD deed must be properly executed.

The benefit of a TOD deed is that it’s revocable. The property owner can change the beneficiary or even cancel the deed during their lifetime, offering flexibility. The TOD deed also allows the owner to retain full control of the property while they’re alive, making it an appealing option for many individuals. 

The deed only becomes effective upon the owner’s death, and it must be recorded with the appropriate Alaska county office to be valid. This strategy is particularly helpful for individuals who own a home or land and wish to transfer it to a specific beneficiary without the delays and costs associated with probate.

Enlist Experienced Legal Support Today

Avoiding probate in Alaska can offer peace of mind, saving your family time and money during a difficult period. There are several methods available to bypass the probate process, including establishing a revocable living trust, using beneficiary designations, holding property jointly, utilizing transfer-on-death deeds, and taking advantage of small estate procedures. 

Gifting assets during life and establishing a durable power of attorney can also be beneficial components of an estate plan. However, it’s important to carefully consider which strategies best fit your personal situation and goals. 

Consulting with an estate planner or legal professional can provide guidance on the most effective ways to reduce or eliminate probate and help you make informed decisions for your future. 

By taking proactive steps, you can reduce the likelihood of your estate being tied up in probate and provide your loved ones with a smoother transition after your passing. Our firm provides legal services to Anchorage, Alaska, as well as Fairbanks, Juneau, Wasilla, and Palmer. Give the Law Office of Justin S. Eppler, LLC a call today to schedule a consultation.