Many people are intimidated by the very idea of estate-planning. You have to admit, the term estate-planning does sound a bit complicated. What if you could take things step-by-step, though? After all, you don't have to make lots of important decisions all at once when you create your estate plan. An estate plan is actually a series of actions rather than one thing. You might want to begin your estate-planning by designating a bank account, for example. Read on to find out how fast and easy this estate-planning step can be.
Keeping Your Assets Away From the Probate Court
Probate is an irreplaceable step for most. It's the time-honored legal practice of ensuring that the property and debts of the deceased are handled fairly and accurately. A will is part of any good estate plan, but even those that pass away with no will have to have their estate probated (unless they have very low-value estates, that is). So, knowing that probate is a simple fact of life, you must then realize that you cannot actually avoid probate. What you can do, however, is you can make it so that there is no property to probate. There are several ways to keep your property away from probate's reach and a payable-on-death designation is one of them.
Removing Assets from Probate
When you make certain moves in estate-planning, you are setting property aside. Any moves to name and deal with property take precedence over probate. For example, if you execute a life estate deed on a home, that home is automatically exempt from probate. The home does not have to be included in probate because it is addressed with a deed that overrides probate and delivers the property to those named on the deed. You can do the same thing with nearly all of your property, including your bank accounts and investment accounts.
Payable-On-Death and Transfers-On-Death (POD and TOD)
The above terms are simple designations that are placed on bank and investment accounts. Once the owner of the accounts passes away and the death certificates are issued, the people named on the accounts are able to access funds that might have been frozen otherwise. Normally, the bank and investment accounts of single owners are frozen upon their death and remain that way during probate. With a POD or a TOD, beneficiaries are able to access those funds almost immediately. Best of all, the entire action can be accomplished with some signatures and Social Security numbers on a form. Accounts can also be divided between more than one beneficiary.
POD and TOD designations are but one way of many estate-planning moves that will make things easier for your loved ones. Speak to an estate-planning attorney or visit a site like https://www.linskylaw.com to find out more.