Probate is time-consuming (6-18+ months), expensive (3-8% of estate value), and public. Many assets can bypass probate entirely through proper planning, passing directly to beneficiaries outside the court process.
10 steps across 4 sections
1. 2. Transfer on Death (TOD) Designations
- TOD accounts You name a beneficiary on your brokerage or investment account. At death, the beneficiary presents a death certificate and claims the assets directly. No probate.
- TOD deeds (also called "beneficiary deeds"): You record a deed naming a beneficiary who receives the real estate at your death. You retain full ownership and control during your lifetime.
2. 3. Payable on Death (POD) Designations
- You fill out a POD form at your bank naming one or more beneficiaries.
- During your lifetime, the beneficiary has no access to or rights over the account.
- At death, the beneficiary presents a certified death certificate to claim the funds.
3. 4. Joint Ownership with Right of Survivorship (JTWROS)
- Joint tenancy with right of survivorship (JTWROS) Available for bank accounts, real estate, vehicles, and investment accounts.
- Tenancy by the entirety A form of JTWROS available only to married couples in some states; provides additional creditor protection.
- Community property with right of survivorship Available in some community property states.
4. 5. Beneficiary Designations
- These accounts pass directly to named beneficiaries by operation of contract, completely bypassing probate.
- Critical Beneficiary designations override your will. If your will says "everything to my spouse" but your IRA names your ex-spouse, the ex-spouse gets the IRA.
Common Mistakes
- Creating a trust but never funding it
- Adding children as joint owners
- Forgetting to update beneficiary designations
- Naming "my estate" as beneficiary
- Assuming all assets are covered
Pro Tips
- Use a "belt and suspenders" approach
- Create a master beneficiary designation list
- For bank accounts, POD is safer than joint ownership
- For real estate in TOD deed states
- Always name primary AND contingent beneficiaries
Sources
- How to Avoid Probate on Bank Accounts: POD and Trusts - LegalClarity
- Avoid Probate with POD and TOD Directives - Planned Giving
- Avoiding Probate with TOD Deed and TOD Account - Providence Wealth
- Which States Allow TOD Deeds for Real Estate? - Nolo
- Transfer on Death Deed: What It Is and How It Works - LegalZoom
- TOD Deed States - Trust & Will
- Transfer on Death Deeds for Real Estate - Nolo
- You Can Avoid Probate Without a Trust - Hamilton Law