Methods For Avoiding Probate
Because of the many drawbacks to the probate process, many people choose to have their property pass outside of probate. The most common ways to pass property outside of probate include:
- A revocable Living Trust. This is the most popular form of probate avoidance. A living trust acts very much like a will except that it avoids the probate process.
- Joint tenancy. In a joint tenancy, each joint tenant owns an equal share of the property. When one of the joint tenants dies, their share will automatically go to the surviving joint tenant. Since joint tenancy property does not go through probate, you cannot transfer joint tenancy property by a will.
- Life insurance. The proceeds of your life insurance policy will pass directly to the beneficiaries that you named on the policy.
- Pay-on-death bank accounts. In these types of accounts (savings, checking, bank money market, certificate of deposit), you will name the person(s) who are to receive any money that remains at your death. While you are alive, the person you name will have no rights to access these accounts.
- IRAs and other retirement plans. Many retirement plans will allow you to name a person to receive any money that remains at your death.