The easiest way to avoid Probate is to spend or gift your money to family, friends or charity. However, specifically avoiding Probate after you pass away can be done with the titling of property into joint tenancy with rights of survivorship (J&S), or payable on death (POD) accounts and transfer on death (TOD) accounts.

Beware of the Probate avoidance pitfalls. Keep in mind that a joint tenant/owner can withdraw the money at any time. Joint property can also be exposed to the claims of creditors. In addition, joint and survivorship or payable on death accounts automatically belong to the survivor and are contractual accounts which are outside the control of the Will. In other words, if a Will were to divide the Estate equally, and an individual set up certain accounts as J&S, POD or TOD, then those accounts would pass outside the Will and go directly to the individual.

Avoiding Probate could also cause the loss of what is called a stepped-up cost basis on greatly appreciated property, which would have otherwise gained a stepped-up or date of death value, and could have created significant tax savings and capital gains avoidance.

For more information about Probate/Estate Administration or Contact Us.