Simple Ways to Avoid Probate

By Attorney M. Nicol Padway

You have the ability to make beneficiary designations (sometimes called TOD [Transfer

on Death] or POD [Payable on Death] designations) on almost any financial asset. In

addition, real estate can also be transferred by way of a Non-Probate “Transfer on

Death Deed” (“TOD Deed”) without having to go to court. A person who designates

beneficiaries on all but fifty thousand dollars’ worth of assets can avoid the entire

probate court process. This strategy of using TOD and POD designations is not

appropriate for all situations but it is often a simple and cost-effective way to avoid

probate.

However, you must be aware that a Will only governs probate property (i.e., a person’s

property that has no beneficiary designation and no surviving joint owner). As such, if a

person designates beneficiaries (TOD deed or TOD account) on most all assets, the

estate does not have any assets to transfer and any special provisions in a Will leaving

assets to grandchildren or others does not go into effect and these special bequests do

not occur.

So, if you want to leave some money to your grandchildren and you have made special

bequests to them in your will, but all your assets have TOD or POD beneficiaries, there

are no assets for the estate. An estate without assets cannot make the special bequests

in the Will. Your grandchildren get nothing.

There are ways to make these special bequests happen even with TOD or POD

designations on your assets. You must make sure that your TOD or POD designations

are coordinated with the intentions expressed in your will. As always, you should consult

with a lawyer knowledgeable in this area of law so that your final desires are actually

achieved. The lawyers at Padway & Padway Ltd. can assist you in all your estate

planning needs.

This blog post is provided for informational purposes only and by its very nature is

general. This information is not intended as legal advice and should not be replied upon.