How To Avoid Probate.

There are many planning devices of which families can take advantage
to avoid having to go through the probate/ administration process. Most of
them are relatively simple. For example, your bank accounts can pass outside
of probate simply by putting a POD (paid on death) or TOD (transfer on death)
designation on the account. Once you have a POD or TOD on the account the
money will go to the designated person(s) upon the presentation of a death
certificate to the bank. Each bank has its own procedure for doing this so
please check with your financial institution for their procedures. Some
people open joint accounts with the person to whom they would want to pass
their money. This is an option. However, in the eyes of the law each joint
owner owns 100% and can withdraw all of the money without the permission of
the other joint owner. Also, the creditors of the joint owner can come after
all the money in the account.

Another way to avoid probate is to put a beneficiary
designation on any account that allows it. Obviously life insurance policies
require beneficiaries, but did you know that IRA and 401K accounts, and
Annuities can have beneficiary designations? The most important thing to
remember is to check or update your beneficiary designations on a regularly
scheduled basis. Additionally, when a major life event occurs, (marriage,
divorce, birth or death) you should check your beneficiary designations. As
we have seen happen several times, you wouldn’t want your ex getting your
401K.

When it comes to real estate, the best way to avoid probate is
to have the property titled in joint tenancy (with one or more individuals)
with right of survivorship. When property is titled in joint tenancy with
right of survivorship, the property does not need to go through probate to
have the deceased individual’s share pass title. The joint owner(s) need only
file an affidavit and the death certificate in the county where the property
is located in order to have the deceased removed from the title. Although
many married couples title their property this way, single adults do not realize
they can own property with another individual (adult child or friend) as
joint tenants with right of survivorship. The only drawback to joint
ownership is that the property is available to the joint owner’s creditors as
well as your own.

Another option to avoid probate is placing your property in a
trust. There are many choices when it comes to trusts and it is best to seek
the advice of an attorney who specializes in this area to determine which
type is best for your circumstance. A properly drafted trust can protect your
property, maximize your estate planning options and pass your property to the
next generation according to your specific instructions and without the
interference of the probate court. Trusts are especially beneficial if you
own real property in more than one state. If your property is not in a trust,
not only do you need to probate in your state of residence, but you must also
open an ancillary probate in each state where you own real property. This can
be expensive and time consuming.

The best way to have your assets pass, upon your death, to the
people you want is to PLAN AHEAD!!!! A good estate planning attorney should
be able to guide you to the best choice for your circumstance and to remind
you to update your plan with each major life event. While each option
presented here can work, each individual’s situation is different. Take the
time to plan so that things can happen the way that you want them to.

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