How to Avoid Probate

Last month we addressed several reasons why you would want to avoid probate.  This month we explore the methods in which you may avoid probate.

Only probate property is administered in the probate proceeding. Probate property is all property that is titled in the decedent’s name alone and which does not have a beneficiary designated on a legal document other than the Will. Thus, with the help of your estate planning attorney, you may ensure that your property is properly titled or designated to ensure your assets do not have to go through probate.

There are different ways to avoid probate depending on the type of property. A Trust is a popular device to avoid probate. What many individuals do not realize, however, is that after you sign the Trust, your assets are not automatically in your Trust and avoid probate. With the help of your estate planning attorney, you must then retitle your assets in the name of your Trust.

 Aside from the Trust, there are several other mechanisms that allow your assets to avoid probate. The following are some examples of property you may own and how it could avoid probate.

Dental Practice

If you own your dental practice with another doctor, you and your partner(s) may want to enter into a Buy-Sell Agreement, which would cause your dental practice interest to avoid probate. If you are the sole owner of your dental practice, you can have a Transfer on Death designation, which is a legally binding document that designates the individual that would inherit your dental practice upon your death. The beneficiary may be an individual or your Trust.

Real Estate

If you own your real estate with your spouse, jointly with rights of survivorship, then the real estate passes to the survivor without going through probate.  In addition, you may have a Transfer on Death Affidavit filed with the County recorder’s office, which would designate the individual that would be the beneficiary of your real estate after both you and your spouse pass away. 

Life insurance

By having an individual or your Trust designated as the beneficiary of your life insurance, the proceeds of your life insurance skip probate.

Bank Accounts

A payable on death bank account allows funds in that bank account to pass directly to beneficiaries named on the account.

 There are various other types of assets that you may own that may skip probate depending on how it is titled or designated. At the end of the day, your estate plan does not end with just signing your Will and Trust. To ensure your loved ones are taken care of and unnecessary delays, confusion, and costs are avoided, you should plan appropriately to avoid probate.