Different people approach estate planning with vastly different goals. A person’s resources and their closest relationships directly impact their estate planning priorities. Regardless of what specific goals an individual has, maximizing how much of their personal property passes to their chosen beneficiaries is often a priority.
People don’t want their legacy wasted on court costs and frivolous disputes. Keeping as much of someone’s personal property out of probate court as possible is one way to ensure that the maximum amount of personal resources transfer to the right parties after someone dies. There are a variety of different tactics for keeping assets out of probate court. For example, if the resources are financial accounts, there is a straightforward way of arranging for their transfer.
Testators can file special paperwork for financial accounts
Financial accounts can contain a significant portion of someone’s personal wealth. Investment accounts, retirement savings accounts, checking accounts and similar resources could contain tens of thousands of dollars or more. Those funds could increase the value of their estate, putting them at risk of tax obligations. They could also be vulnerable to creditor claims. An account held solely in the name of someone who dies usually becomes part of their estate.
However, account holders can arrange for the transfer of their financial resources to a beneficiary at the time of their death. By filing transfer on death paperwork with financial institutions, testators can keep checking accounts and other financial resources out of probate court. Their selected beneficiary must go in person to the financial institution in most cases with both state-issued identification and a copy of the death certificate. These documents may allow a specific beneficiary to assume ownership of a financial account without any probate court involvement. This process is beneficial for a number of reasons, not the least of which is the near immediate access to resources available after successfully completing the transfer on death process.
Of course, there are a few risks. The most important concern might be keeping a record of the accounts with such designations attached. The intended recipients someone appoints might change, and people must be proactive about updating their documents or risk having the account pass through probate despite their planning attempts. Learning more about different estate planning tactics may benefit those seeking to minimize probate challenges. Adults who plan carefully me be able to leave a more meaningful legacy after they die.