Most people don’t want to go through probate if they don’t have to. Probate is a public forum and privacy is minimized. Also, probate takes time and can be expensive. While probate can be necessary, there are planning techniques to avoid it.
POD and TOD beneficiaries: If you have bank accounts, brokerage accounts, life insurance policies, or retirement accounts you can name a Payable on Death (“POD”) or Transfer on Death (“TOD”) beneficiary. After the death of the owner, the institution will pay the proceeds to the named beneficiary with proof of death, usually a certified death certificate. No probate is needed to do this.
Living Trust: Holding property during your lifetime in a living trust is another way to ensure your beneficiaries receive property outside the probate process. When a trust is created, distribution language can be drafted so that upon death of the trust creator distributions from the trust assets are made to named beneficiaries. Because the trust owns the property during your life, when you pass away no probate is needed to transfer title because the property is in the trust already. Simply, the then acting trustee makes the distribution according to the language of the trust.
Joint Tenancy: Married couples often hold title to real estate as Joint Tenants with Rights of Survivorship (“JTWROS”). When the first tenant passes away, there is no probate needed as the surviving joint tenant is the owner of the property. However, when the survivor does die, if no other changes to ownership have been made, then a probate will be necessary to transfer title. By placing the property in a living trust with named beneficiaries, probate can be avoided.
