Avoidance of Probate

A will provides instructions on how your estate is to be divided and distributed after your death. However, it is extremely important to understand exactly what your will addresses and what your estate consists of, and more importantly, what is not addressed by your will and not included in your estate.

Any property or assets which are held in any one of the following ways is not addressed by your will, and is not includable in your estate:

1. JOINT TENANCY - any property or assets held in joint tenancy pass automatically to the surviving joint tenant or tenants upon the death of one, regardless of what the will says.
2. BENEFICIARY PROVISIONS - any assets held with a beneficiary provision, (including but not limited to bank accounts or financial investments, life insurance, IRA's, retirement or pension plans), pass directly to the beneficiary or alternate beneficiary by contract, because that is the way you set it up, and is not part of your estate, and goes to the beneficiary regardless of what your will says.
3. TOD AND POD ACCOUNTS - accounts or assets may be held with transfer on death (TOD) or payable or death (POD) provisions, which mean that these funds will be paid or transferred upon your death to the persons designated, regardless of what your will says.
4. TRUSTS - any property or assets held in a living or inter vivos trust will be governed by the terms of the trust and passed to the individuals or institutions enumerated in the trust document, upon your death, regardless of what your will says.

Many people do not realize that assets held in any of the above four (4) ways will pass automatically, in spite of what your will says. For instance, many people will make a will expecting that their entire estate will be distributed according to their preferences expressed in the will, not realizing that one or two or more of their major assets have a beneficiary provision, or are held in joint tenancy, and thus will not be part of their estate or addressed by their intentions as expressed in their will.

The above four (4) ways of holding assets are certainly ways to avoid probate since, if most or all of your assets are held in one of these ways, there will be no estate and no need for probate. On the other hand, having to probate an estate is not that big a deal, nor that expensive, unless there is a fight between heirs or legatees.

Finally, it is worth noting that, for people who already have made wills, establishing an asset in one of the above manners is a way to set aside something for someone who is not named or covered in your will.

Contact my firm to discuss your case.