Can and Should You Avoid Probate?
Upon your passing, your property goes to your beneficiaries via your will, if you prepared one. If you do not have a will, intestacy laws determine who receives your inheritance. In order for your beneficiaries to attain the title(s) to your property, the estate usually goes through the probate process, which establishes your will's legitimacy. Probate can sometimes be a lengthy and contentious process. Certain kinds of properties, however, bypass the probate process automatically upon your death.
Types of property that bypass probate
Properties that avoid probate include:
- Joint tenant or transfer on death real estate
- Living trusts
- Joint bank accounts
- Accounts with pay-upon-death provisions, such as certificates of deposits
- Life insurance policies and retirement plans with beneficiaries designated
- Securities that can be designated as transferable upon death
In a joint tenancy, each owner has a right of survivorship. If one of the joint tenants dies, their ownership interest automatically passes to the surviving owner(s) outside of the probate administration. In contrast, tenants in common do not have a right of survivorship. Rather, they can sell their share (not necessarily equal) of the property during their lifetime or pass their share in their will.
Disadvantage of property with a right of survivorship
While you can unilaterally revoke or change your will, you cannot singlehandedly revoke an owner's interest in a joint tenancy. Actions taken on a home held jointly, such as taking out a mortgage, require each owner's consent.
Still have questions? An experienced estate administration attorney from Hess & Jendro Law Office, P.A. can review your options with you and explain the benefits of avoiding or planning for probate.