By Solid Serenity Legal Solutions
So you finished your will and feel confident you know where each of your possessions should and will go after you die. Unfortunately, it might not be that simple.
While many of your assets can be passed through your will (or probate) there are other kinds of assets that will pass without a probate. Here we will talk about three ways your assets can be titled to avoid probate.
(1) Jointly Owned Assets
Whether you have your house jointly titled with your spouse or your bank or investment accounts held jointly with one of your children, if you have an asset that is jointly titled, then it will not matter what your will states in regards to that asset, it will go straight to the surviving owner.
Often, married couples will have one another listed on bank accounts, investment accounts, real estate, etc. so that if one of them were to die, the other would instantly have access to the asset.
What sometimes happens, though, is that after the death of one, the surviving partner will add a child to the accounts to ensure a trusted family member has access if needed. This can become an issue, though, if you have multiple children and want to leave the asset to each of them since one child would already have sole possession of the asset.
However, if you only have one child, or are leaving specific assets to individual children, then this can work to your benefit by not having to probate the asset.
(2) Payable (or Transfer) on Death
Joint titles aren’t the only way for one person to get an asset immediately on the death of a person. Many bank and investment accounts have the option to list someone as Payable on Death (POD) or Transfer on Death (TOD) beneficiaries.
What both of these essentially mean is that, upon the death of the owner, the asset will be paid or transferred to the listed POD or TOD beneficiary or beneficiaries. If there is a POD or TOD listed, then that person will get the asset even if the will states differently.
Similarly to jointly owned assets, Payable on Death beneficiaries are not a bad choice to avoid probate. Be aware of which assets are already owned jointly or with Payable on Death beneficiaries so you can properly plan for the other assets in your estate.
(3) Beneficiary Designation
The third way for an asset to transfer outside of a will or probate is through beneficiary designations.
Whether the asset is an IRA, 401k, Life Insurance, or some other account, there will often be an option or requirement to designate a beneficiary. If there is a listed beneficiary, then that asset will not go through probate or pass according to your Will.
Again, this can be a good thing for a number of reasons, but as with jointly owned assets, PODs, and TODs, it is important to know how your assets are owned and whether or not they will go through probate so you can make the most informed decisions regarding your estate.
Call an estate planning attorney today to figure out what will happen to your assets if something happens to you and what you need to do to make sure your assets go where you want them to after your death!