Probate is the court process of determining who gets your assets when you die. A Will does not avoid probate, but it governs who will get your assets owned in your sole name. To avoid probate, you need to structure things so that, when you die, your assets pass automatically to the persons you want to receive them. Here are some ways to avoid the probate process:
- Name a Beneficiary. Many assets, such as IRAs, life insurance, annuities, etc. require the naming of a beneficiary. For bank accounts and brokerage accounts, you may be able to make a “pay on death” (POD) or “transfer on death” (TOD) designation so that probate can be avoided.
- Own assets jointly with someone else. With a joint account, title passes to the surviving joint owner automatically.
- Use Deed with Retained Life Estate. You can give a “remainder” interest in real estate to the person to whom you want title to go when you die. You reserve a “life estate” so you get to live there for life. Title passes automatically when you die and does not have to go through probate.
- Don’t Forget Trusts. In the right situation, trusts can avoid probate and ensure that your assets go to the persons you want to benefit. They are also great to provide asset protection for your beneficiaries.
- Give assets away early. I often joke with my clients that, by giving things away early, you get to avoid probate while also getting to hear people say “thank you.” Don’t give away things you might need, of course (like all your money). One variation on this strategy is to have the agent you have named in your Power of Attorney (you do have a Power of Attorney, right?) give your property away just before you die.
- Deal with the car. Because the car has a title, you can’t sell it unless the title shows it is yours. If you die and your spouse survives you, it is presumed that he/she is the surviving joint owner. Otherwise, there needs to be probate. The most common way to avoid this is to name a joint owner. Remember, though, that the joint owner may be liable if you get into an accident. So you may want to get additional insurance if you own your car in joint names.
- Don’t forget anything. The old jalopy, the old passbook account you forgot about, the life insurance policy where you forgot to change the beneficiary when your spouse died. These all need to be dealt with, and name a beneficiary, if possible.
If you need more information on this, you can contact me at (508) 860-1470 or firstname.lastname@example.org. You can also view my 10-minute Q&A Fireside Chats on Frank and Mary’s YouTube channel, www.YouTube.com/ElderLawFrankAndMary.