Avoiding Probate
“Avoiding Probate”
When I work with estate planning clients, the most common goal of my clients is to “avoid probate.” Clients will come to me and tell me that they would like me to prepare a will for them so they can “avoid probate.” There are ways to avoid Probate; however, you will not avoid probate by creating a will. In fact, a will is almost guaranteed to be “probated.”
Clients can avoid probate by making sure that any bank accounts and retirement accounts have a “transfer on death beneficiary” designated with the bank or account manager. Generally, you will be required to fill out TOD beneficiary designation forms when you open any type of retirement account; however, this practice is not common with regular savings, checking, or certificate of deposit accounts. In order to designate a TOD beneficiary for these accounts, the client will have to go to the teller and request a form to fill out to ensure their wishes are carried out.
Clients can “avoid probate” with property such as bank accounts and retirement accounts (as stated above), real property, life insurance policies, and vehicles. If a client successfully completes the paperwork for these items, these items will be kept out of the probate court. With that said, if the client owns other personal property at his death, the heirs will have to go through probate court to determine the proper disposition of the other property. This is where a will becomes very helpful.
If the client had a will at the time she passed away, the executor will be able to determine the decedent’s wishes and distribute the property according to the directions in the will. If there is no will, the property will be distributed according to the (intestacy) laws of the state in which the decedent died. If you agree with the way the law distributes property when a person dies intestate, you may choose not to prepare a will at all; however, you must be familiar with the intestate laws in order to make that determination. I recommend seeking counsel when determining which estate planning tools are right for your specific situation.
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