When you take a surface look at the subject of estate planning, you may read about the legal process of probate and come away with the idea that every postmortem asset transfer is subject to the probate process. In fact, this is not the case. Even if you are not intentionally trying to avoid probate, the probate process does not come into play under some circumstances.
You may have insurance policies on your life to protect your loved ones. When you take out a life insurance policy, the relationship is between you, the company, and the beneficiary. You enter into a contract with the company, and the company is compelled to comply with the terms of the contractual agreement.
After your passing, the beneficiaries that you name in the policies will be paid directly by the company or companies. These asset transfers would not be subject to the probate process.
Property Held in Joint Tenancy
It is possible to add a co-owner to your property. This person would be called a joint tenant. Joint tenancy typically comes with something called right of survivorship. Because of this right, a surviving joint tenant would inherit the entirety of the property after the passing of one joint tenant. The probate process would not be a factor.
We should point out the fact that the joint tenant would own half of the property while you are living. This is something to take into consideration if you think that joint tenancy could be a good estate planning solution. Since the joint tenant would own half of the property, anyone who was to sue the joint tenant could go after that portion of the property.
Plus, you would have to come to an agreement with the joint tenant if you wanted to sell the property.
Payable on Death Accounts
A payable on death account is a bank account or brokerage account that has a beneficiary. As the person creating the account, you are the primary account holder, and you would have exclusive access to the account while you are living. The beneficiary could not access the resources.
After your passing, the beneficiary would assume ownership of the remainder in the account outside of probate.
Free Report on Probate
We have prepared an in-depth report on the probate process. It will answer most of your questions, and it will help you move forward in a fully informed manner.
Visit this page to obtain your copy of the report: Probate Report.
Schedule a Free Consultation
Our firm can help if you would like to discuss your estate planning objectives with a licensed professional. We offer free consultations, and you can visit this page to set up an appointment: Grand Forks ND Estate Planning Attorneys.