Often probate avoidance is an estate planning goal.Â After all, probate is expensive, time consuming, and a hassle.Â In addition, probate is a public court supervised process, which means that anyone and everyone can know your personal and family business.Â They know who gets what and what debts you owed, even what assets you owned at your death.Â Probate is to be avoided.
You can avoid probate by owning your assets properly.Â A fully funded revocable living trust avoids probate and has no pitfalls.Â Other assets avoid probate but they have pitfalls so consult a qualified estate planning attorney and ask how you should own your assets.
Assets that avoid probate are revocable living trust assets, assets owned in joint tenancy by the right of survivorship, pay on death, transfer on death, and in trust for as well as beneficiary designation assets, so long as they are made payable to an individual or trust, not to the estate.Â Beneficiary designation assets include life insurance policies, retirement plans, and annuities.
Assets that go through probate are all those assets in your individual name, that donâ€™t have a beneficiary designation.
Here are examples of non-probate assets:
- A life insurance policy that names the spouse as the beneficiary.
- A retirement plan that names the spouse as a beneficiary.
- A life insurance policy that names a living trust or an irrevocable trust as beneficiary.
- A home owned as joint tenants with right of survivorship.
- A bank account or investment account titled in the name of a living trust.
- A bank account or investment account titled joint names with right of survivorship.
- A bank account owned in trust for a designated individual beneficiary.
Here are examples of probate assets:
- A life insurance policy made payable to an estate.
- A retirement plan made payable to an estate.
- A home in someoneâ€™s individual name.
- A bank account or investment account in an individual name.
If you want to avoid probate, consult with a qualified estate planning attorney and own your assets properly.