- Avoiding Probate
- March 13, 2012 | Author: Kim Boyer
- Law Firm: Durham Jones & Pinegar, P.C. - Las Vegas Office
- When an individual dies owning property solely in his or her name, without a beneficiary designation, a probate is required to pass title to the property. If there is a valid will, the property passes according to its terms. If there is no will, the property passes to the individual's heirs at law as determined under the laws of intestacy.
It is possible to legally pass property to another person without going through probate. The following are examples of some probate avoidance devices. Keep in mind that although it is often beneficial to avoid probate, because it can be costly and time consuming, these devices have pitfalls. Additionally, probate is sometimes the best option depending on the situation. The following are examples of probate avoidance devices:
Joint Tenancy - Adding another person to your assets as a joint owner or "joint tenant with rights of survivorship" will allow your property to pass to the other individual upon your death without the need for a probate proceeding. The obvious pitfall is that while you are alive the other owner has access to 100% of that asset. Also, the asset is subject to any claims of the co-owner and subject to the creditors of the co-owner.
Beneficiary Designations - Adding Transfer on Death (TOD) or Pay on Death (POD) beneficiaries to your bank accounts and Beneficiary Deeds to real estate can avoid probate. Unlike joint tenancy, adding beneficiary designations to your property allows you to name an individual to inherit your property at your death without giving them any current ownership. One of the problems associated with beneficiary designations is that often times, the estate is not divided equally among the family as was intended by the individual. You can also record a beneficiary deed on your real property and it will pass to the named beneficiary on your death.
Revocable Living Trust - Revocable trusts are documents where an individual "Trustor" creates a trust instrument and names an individual (usually themselves) or a bank "Trustee." The Trustor then transfers property into the trust and the Trustee manages the property and distributes the property according to the terms of the trust. A Revocable Living Trust allows you to specify how you wish your property to pass. A Revocable Living Trust also avoids some of the adverse tax consequences associated with joint titling and beneficiary designations, while accomplishing the same goal of avoiding probate.
Other Considerations - It is VERY important to understand that if you have beneficiaries listed on your assets, upon your death your assets will be distributed to those beneficiaries you have listed. They WILL NOT be distributed according to your Last Will and Testament.
If you are married, before titling/adding beneficiaries to your assets, you need to take into account your husband or wife's community property interest in the asset.
The above information is general. Before taking action to avoid probate, you should consult an estate planning attorney who can examine your specific situation and advise you accordingly.
This information is for general informational purposes only and does not constitute legal advice. For specific questions, you should consult a qualified attorney.