If you are like most people, you want to make sure that you avoid the time consuming and costly process of probate. Below are some easy ways to make sure your assets are not subject to the probate process. After your death, this will allow your assets to be transferred more quickly.
Avoid probate with a payable-on-death account
Setting up a payable-on-death account can allow you to keep your assets out of probate. In order to set up this account, you will need to fill out a form at your bank. This form will name an individual who will inherit the assets, automatically, after your death.
While you are alive, this person will have no control over your assets. After your death, the person will be required to show proof of your death along with proper identification in order to get access to the assets.
Avoid probate by naming a beneficiary
When you open a retirement account, you are able to name a beneficiary. When you die, this person is able to claim the funds that are left in the account. You can name whoever you want as the beneficiary, however if you are married, your spouse may have rights to the funds. Take note of the following rules:
• If you have a 401(k) account, your spouse must agree (in writing) to your naming of another beneficiary, otherwise your spouse is entitled to the funds.
• Texas law allows couples to sign an agreement which makes some property community property. If any money was contributed to your retirement account while you were married, the assets remain community property which means your spouse has half ownership.
Avoid probate by with a fully funded revocable living trust
A fully funded revocable living trust avoids probate, along with its many other benefits such as disability planning, federal estate tax savings, and asset protection for beneficiaries.
If you have any questions about avoiding probate, consult with an experienced estate planning attorney.
John R. Vermillion & Associates, LLC is a member of the American Academy of Estate Planning Attorneys.