A non-probate transfer is a way of taking or distributing property or assets in your state to any of your beneficiaries under a will that does not force the estate to also go through probate. Whatever parts of your estate that do have to go to heirs or beneficiaries through probate would be counted as part of the probate estate. On the other hand, any assets that can pass to beneficiaries or heirs outside of the probate process is classified as non-probate asset. It is more advantageous for an asset to be a non-probate asset considering the time and cost commitments associated with going through probate.
There are different types of non-probate transfers that can be used in estate planning for you. Let's walk through some of the more common types that you may encounter in your estate planning process. The first would be passing property to beneficiaries under your will through your living trust. This can be done oftentimes for children if you and your spouse were to pass away at the same time a living trust can be created through your will which holds the property on behalf of your kids. The trustee of the trust can then release certain types of property based on different milestones in your child's life.
If you have a checking or savings account through a bank or credit union then it is likely that you can take advantage of a non-probate transfer known as a transfer on death account. You can contact the bank or credit union to talk to them about the availability of this type of benefit through your account. Simply put, all you would need to do is designate a beneficiary for your account to transfer to automatically at your death. That person would need to go to the bank or credit union with a copy of her death certificate and would be able to gain access to the funds of your account.
Another interesting type of non-probate transfer that will be available to you in your estate is leaving assets to a beneficiary who is named in a life insurance policy. For my money, literally and figuratively, the best and only type of life insurance that you should be considering is known as term life insurance. Term life insurance allows you to pay an annual premium for a Death benefit that is known at the time your policy is taken out. This is the simplest type of life insurance and has the best bang for your buck. Whole life insurance typically is more complicated and much more expensive. A term life insurance policy would be able to go directly to the beneficiary under the policy and would not have to go through probate.
Do you have any retirement accounts or investments? If so, then it is likely that the majority of these types of assets would be nonprivate transfers. Examples include individual retirement accounts, 401K S, and other types of retirement vehicles. You can list beneficiaries and secondary beneficiaries in your documents for these retirement accounts. Probably the most important thing that you need to keep in mind is that you can and should make sure to update beneficiaries after major life events. For example, if you get a divorce and had your spouse listed as your beneficiary then you need to update the beneficiary so that your ex-boss does not receive the money in your account if you pass away. There is nothing wrong with having a temporary beneficiary inserted, such as a child, and then you can put a new spouse or another person in the spot for the beneficiary later. The same would apply if a spouse or other beneficiary passes away.
If you hold ownership interests in property with another person under a joint tenancy then your share of the property would automatically transfer to your joint tenant. Keep this in mind if you own property with a business partner or something of the like. Depending upon how you structure your ownership documents in particular assets or property you can make sure that the property can pass to your partner without having to go through probate first. you can speak with a business formation attorney, tax attorney, or even one of the estate planning attorneys with the Law Office of Bryan Fagan to learn more about the impacts of these types of decisions on your life and your estate.
Another way to avoid having to go through the expense and time of probate would be to simply gift assets to two heirs or beneficiaries during your lifetime so that you do not have to worry about your estate needs to go through probate. For example, while you may have a will in place, they also choose to gift certain items or assets to family members or other people while you are still alive. This would allow you to be able to benefit the lives of those people while you are still living and remove the chance of those items would need to go through probate after you pass away.
There is also something called a transfer on death deed that would allow you to name a specific beneficiary who would be able to inherit your real property at the time of your death. Whenever you talk about performing some sort of estate planning action involving expensive and valuable assets like real estate you should consider speaking with an estate planning attorney or real estate lawyer who can assist you in drafting documents and filing everything so that there is a record of the steps you have taken to benefit your family. Going through the trouble of estate planning to the six tents only to find that you have misfiled or drafted incorrectly a document can be a huge detriment and waste of time and assets.
How to use nonprobate transfers in your estate planning
whenever you come around to creating an estate plan for yourself it is important to understand that non-probate transfers can be crucially important to you in your family. There is almost no downside that we can think of in terms of why a non-probate transfer should not be an instrument that you utilized to save money, expedite the process of distributing assets at your death, and also avoid making anything regarding your state part of the public record. There are practical considerations to think about when it comes to non-probate transfers that can seriously impact your beneficiaries or heirs in positive ways.
Consider for a moment if you have a family member or other potential beneficiary who is a young, single mother. This is the person that could stand to benefit a great deal from a quick and easy transfer of assets from your estate when you pass away. However, there is nothing quick or easy about the probate process. Getting involved in the probate process may be necessary for some people but others can be avoided with proper estate planning.
By utilizing nonprobate transfers of property you can more readily get the money and assets that a potential beneficiary may need sooner rather than later. That single mother that we just finished talking about could be listed as a beneficiary for a life insurance policy, retirement plan, or another non-probate asset. This would allow her to receive assets and property very quickly after your debt that she can utilize to benefit herself and her child. This is the sort of practical consideration that I was talking about in terms of why it's so important to be able to understand how non-probate assets can be utilized to your advantage and the advantage of your family.
Therefore, I think today's blog posts from the Law Office of Bryan Fagan are so important. It is extremely detrimental to have to go through probate when it may otherwise be unnecessary considering your circumstances. For most people, the size of your estate and the methods of non-probate transfers can help you to avoid estate to have to go through probate. Do not underestimate just how simple the non-probate process can be compared to having to go through probate. If every state must go through probate at the time of a person passing would be a major mistake. Rather, you can learn about this sort of material here on this blog post and receive perspective and information about the specifics of your life by reaching out to an experienced estate planning attorney today.
You can also think about the process from the perspective of your family. When you pass away, I would think that your goal would be to allow your family to grieve your loss and think about you and the memories of you with them. Losing a person, no matter the circumstances can be a shock to the system and can lead your family to not necessarily be willing or able to think through certain situations with much clarity. Your family may be in a bit of a fog for an extended period after your passing. As a result, you should take steps now to avoid circumstances where your family will have to go through a lot of stress and hardship associated with your death. The probate process will almost certainly make life more difficult for your family during a time that should not be devoted to paperwork, lawyers, and judges.
The simple truth is that once your estate becomes involved in the probate process there is no telling how long the process can take and to what extent your property will be tied up in the legal process of probate. during this time, it is very likely that the executor of your will or the administrator of your estate would have to receive permission from the probate court judge to perform even basic steps of dividing property to heirs or beneficiaries. The last thing you want to do in a situation like this leaves it up to a probate court judge to determine how in when the property should be divided in your case.
Simply put, when you go to the probate court you are opening your family and your state up to the schedule and decisions of the government. No matter what your opinions are on this subject it is undoubtedly true that your family and your beneficiaries well know what is better for your state than a probate court judge. Do not underestimate the importance of having a will and taking advantage of non-probate transfers wherever and whenever possible. Do not assume that a probate court judge will always have the most objective and best course of action for your family. Rather, you should place trust in yourself and your ability to plan for end-of-life circumstances with your family.
You can also approach this subject as being important because the probate process makes your family's financial situation as well as relational situations part of the public record. Any hearings that are held in court are open to the public. It is also relatively simple to gain access to a person's will or other documents online through court filings. By the way, if you are opening yourself and your family up to scrutiny by exposing details of your lives through probate. Rather, you can avoid this process by being savvy about how you take advantage of bond probate transfers as well as other parts of the state planning.
If you have to go through probate to transfer some assets upon your passing, then it is very likely that your executor of the estate would have to hire an attorney. There is also paperwork associated with the process and steps that must be followed to ensure that the assets are transferred properly, and the law is followed to the best of your ability. While there is nothing wrong with hiring an attorney to assist you, your family, and your estate in end-of-life planning and estate planning if you can avoid doing so it would be so good vantage as far as time and resources not being used in that way.
This is especially true when you consider that there are many simple and effective ways to divide assets and distribute property that does not have to utilize the probate process. We have walked through many general examples of how to do so in today's blog post. However, if you have specific questions about how to do this in your personal life you can and should contact an experienced estate planning attorney today. The attorneys with the Law Office of Bryan Fagan are equipped and able to help you gain knowledge of estate planning as well as how to avoid unnecessary costs delays and expenses associated with end-of-life scenarios.
Do not be dissuaded from creating an estate plan for your family and your state because you think doing so costs a lot of money. Unfortunately, one of the realities that I have come to find out in my years as an estate planning attorney is that many people believe estate planning is either too expensive for them or only designed for rich people. However, this could not be further from the truth. Any adult can and should create an estate plan for themselves. It does not take much time, expertise, or money to do so. It is also not necessary for you to have an attorney assist you with this process although it can be extremely helpful.
We have just walked through some of the methods that you can employ to not even have to go through probate or necessarily have a will. Although this type of simple estate planning may not be an option for everyone reading this blog post I'm confident that for many of you the information contained in today's blog post can and will provide you with a lot of benefits both now and in the future. You can consider your options and then move forward to think more about Do plan for end-of-life events and estate planning.
The simple truth is that none of us know the moment in time that will be our last period this is sort of a difficult ending to today's blog post, but it is the absolute truth. When you consider that we do not know the moment in time that we will pass away that leaves us very little time, relatively speaking, to plan for those end-of-life stages and to help ensure that our family and potential beneficiaries are cared for in the manner we would like. Do not leave to chance something that you can take positive steps towards handling today. Please reach out to one of the experienced estate planning attorneys with the Law Office of Bryan Fagan to find out more about let's take planning matters.
Questions about the material contained in today's blog post? Contact the Law Office of Bryan Fagan
if you have any questions about the material contained in today's blog post, please do not hesitate to contact the Law Office of Bryan Fagan. Our licensed estate planning attorneys offer free of charge consultations six days a week in person, over the phone, and via video. These consultations are a great way for you to learn more about the world of estate planning law as well as how your family circumstances may be impacted by in the end of life situation or probate case.
