Estate Planning 101: Tips to Avoid Probate

Estate Planning 101: Tips to Avoid Probate

Estate planning is not a fun topic for most people. Naming and sharing key estate information is a reminder that one day someone might need to act on your behalf – and that’s not a comfortable topic. Being proactive will serve you and your loved ones well in the future – trust us. There are many things you can do, and we’ll highlight just a few in this blog. 

One of the simplest steps you can take is to name a beneficiary. This act can help ensure your assets are transferred according to your wishes. In addition, it may make it easier for your loved ones to access these funds when they may need them most. You can name primary and secondary beneficiaries on financial accounts, life insurance policies, assets (house, car, etc.), and other items. Download our beneficiary checklist to get started today. 

Another area you should consider is having a well-drafted will. This can help make sure your assets are dispersed according to your wishes. A will can also ensure that proper guardians are selected for your children. A will does not prevent assets from passing through Probate Court, which can be time-consuming and costly to your estate. As planners we try to avoid Probate Court when possible. The way you title assets can help you avoid the costs and delays of Probate Court when passing assets. 

Below are five simple steps you can take to ensure your assets pass efficiently and effectively. 

1. Make sure your retirement accounts have beneficiaries listed. A beneficiary on an IRA or qualified plan will supersede a will and avoid probate court. It is highly recommended that you list a contingent beneficiary as well in case your primary beneficiary is no longer living when you die. 
2. Titling assets as Joint Tenancy With Rights of Survivorship (JTWROS) allows for 50/50 ownership of assets. This is common for non-qualified investment accounts in many states, but other assets such as vehicles can be titled this way. JTWROS provides immediate survivorship, thus the assets can avoid Probate. Keep in mind JTWROS gives the other owner equal rights regarding the asset while you are living.  
3. Bank accounts can be titled as Payable on Death (POD) or Transfer on Death (TOD). 
4. Unless a life insurance policy is purchased for the purpose of creating liquidity to a trust or estate plan, we typically recommend listing primary and contingent beneficiaries. This way the benefit can be passed tax-free and received by beneficiaries in a timely manner. 
5. Consult an estate attorney.

Since wills can be contested by heirs, it is often recommended that unmarried partners title their assets properly or list each other as beneficiaries to ensure assets pass as they desire. Crosby Advisory Group recommends that you consult an estate attorney before drafting a will and consult that attorney for all estate planning questions and strategies.
 

Disclaimer: Crosby Advisory Group, LLC is a registered investment advisor. This newsletter is for informational purposes and does not reflect direct investment or tax advice. Investing involves risk including the potential loss of principal. Not all investments are suitable for all people. Crosby Advisory Group, LLC has ownership interest in NMD Insurance Agency and CAG Marketing.