Articles of Interest

Five Ways to Avoid Probate

by Jeff Cory, CFP, ChFC,
Executive Director

If you or a loved one has ever been involved in the probating of a Will, either as a personal representative (executor) or expectant beneficiary, you know firsthand why many people attempt to avoid probate administration. Because of attorney's fees, personal representative and court costs, unwanted publicity, and time delays often involved in the probating process, individuals may employ a number of techniques to transfer property at their death.

Keep in mind, the probate process only applies to assets that are titled in your name individually. The probate process does not cover assets held in joint names, assets held in trust and assets that pass by operation of law.

Common probate avoidance techniques include:

Joint Tenancy: joint tenancy is a form of title arrangement, often between spouses or parents and children, whereby title passes automatically to the surviving joint tenant.

Revocable Living Trust: a Revocable Living Trust is an effective means of avoiding probate, and it has the additional advantage of providing money management of assets in case of incapacity or at death.

Totten Trust: a Totten trust is a fancy name for placing a bank account in trust for another individual. Typical wording of an account would be, "Mary Smith, in trust for (ITF) Johnny Smith."

Life Insurance and Retirement Plans: the proceeds of life insurance or most retirement plan accounts are rarely subject to probate, when an individual or charitable organization is named as beneficiary and not the descendant's estate.

Transfer on Death (TOD): a relatively new concept, a TOD permits securities and securities accounts to be registered so that ownership automatically passes to named beneficiaries at the death of the owner(s).

If you'd like to learn more about any of these probate avoidance techniques, or if it has been awhile since you reviewed your estate plan, contact me at 466-8484 to schedule a complimentary appointment. The Legacy Foundation serves the residents of Shell Point with professional estate and wealth planning services.

The preceding information is not meant as specific legal advice and does not constitute a recommendation of any legal document for a specific person. Please consult with your legal or professional advisors before making any decisions.