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How to Avoid Probate

Understanding how to avoid probate can save your estate thousands of dollars and endless hours of time. Many people do not realize that the probate process takes an average of three years to complete. During this time assets depreciate in value while attorney fees escalate.

The following tips reveal how to avoid probate strategies which can easily be implemented at little or no charge.

Banks allow customers to designate payable on death beneficiaries for checking and savings accounts. All that is required is filling out a simple form that includes the beneficiary's name, address, phone and social security number. POD benefits can be arranged when establishing a bank account or at anytime thereafter.

Married couples who hold joint accounts should assign their spouse as the beneficiary as a protective measure. In most instances, funds held in joint accounts automatically transfer to your spouse. However, in rare instances joint bank accounts can be frozen until the spouse is able to produce legal documents proving they are entitled to the funds.

Individuals who have financial holdings such as investment portfolios and individual retirement accounts can designate transfer on death beneficiaries. Each named beneficiary can choose to either transfer the funds into their own investment account or cash-out the account.

When investments are rolled over into another account the funds remain tax-free until disbursement. If the beneficiary cashes out, they will be subject to taxes on the inherited amount. Careful consideration should be given to cashing out investment accounts gifted through inheritence as substantial taxation could occur.

Designated beneficiaries cannot access bank accounts or financial holdings while you are still alive. Upon your death, the probate executor must obtain date-of-death values for the accounts and submit forms to the county tax assessor's office. This action is required to ensure you don't owe any outstanding taxes.

Once the tax assessor signs off on the form, beneficiaries must present a copy of the death certificate to the bank where funds are held. Banks will then distribute the funds according to the established payable on death benefits

These are just a few ways to avoid probate. I invite you to learn more about the probate process in our estate planning article library. Here you'll learn additional tips on how to avoid probate, designating an estate administrator, executing a Will and much more.

If you are entitled to assets held in probate and need to sell them for cash, I might be able to help. I buy assets held in California probate and am particularly interested in real estate holdings. Feel free to submit information about probate estate holdings via the "Forms" tab at the top of this page.

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Published on March 23, 2009 at 02:17 AM | Comments: 2

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If there is NO will but the deceast has Benificiaries on life ins- Pensions - RRSP's - --are these to be put together with assets - [ such as bank accounts and real estate ] to divide between family or do we just divide the assets ??
Example - He has benificiaries on life - Pention & RRSP's --Plus has an apartment and Stocks and Bank Accounts ---Do we take away the benificiary amount from the estate then give remainder up to even amounts to family?
Say I benifit 40% his to amount of 200,000 on Life and get no more because the two remainding siblings need to recieve the same? How does this work ?

linda | September 13, 2010 11:39 AM


This is my best suggestion. Contact a Family Law Attorney in your State. They will be familiar with that particular states estate planning laws.

Simon Volkov | September 14, 2010 4:17 PM


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