You have spent time and effort creating a wonderful estate plan. But, because you didn’t update your assets’ title and beneficiary designations, you unknowingly disinherit your heirs.
Transcript: Wealth Inside and Out® Podcast – Ways to Avoid Probate on Your Assets
Hi, my name is Annette Bau (bah oo), and I’m a Certified Financial Planner™ and founder of The Millionaire Insider®.
This is the Wealth Inside and Out® Podcast.
Your Next Step Financial Assessment
If you need help on the best next step to secure your financial future, click here.
FREE Estate Planning Checklist
This checklist is a guide that provides insight on ways to avoid probate and provides you with the steps you need to take to ensure your entire estate plan is in order, and it is priceless.
It can save you a lot of time, money, and stress. So again, https://themillionaireinsider.com/epc.
People often spend less money when they have their estate plans in order. More money goes to their heirs, and they have less stress. They have fewer things to worry about. And I also have seen studies that show people live longer.
I encourage you to download this free guide. Again, https://themillionaireinsider.com/epc. You’re going to love that resource.
Millionaireseries.com® copywrites all materials and intellectual property.
This information is not a substitute for professional advice. It does not provide specific guidance on investments, estate planning, finances, taxes, retirement, or healthcare.
All participants agree to hold millionaireseries.com® and its affiliates harmless for results achieved or not achieved. And that’s especially important today because we are not attorneys.
Today, Oscar Alvarez is sharing insight on probate. We are both CFP’s®. Oscar is also a CDFA®, Certified Divorce Financial Analyst. We are not attorneys, but we do a lot of estate planning in conjunction with attorneys.
What is Probate?
Probate is a legal process, and it’s designed to help an estate distribute its assets to the beneficiaries of the deceased. It also ensures that the estate pays any debts it owes.
It is a check and balance. If you can avoid it, it can save time and headaches, which we’ll discuss further.
Completing Your Estate Plan
Many people think they have completed their estate plan but haven’t.
How Assets Pass to Your Heirs
Assets pass via title (such as joint tenants), beneficiaries, and will or trust.
- Real estate and bank accounts pass by the title
- IRAs, annuities, and life insurance pass via the beneficiary
You can complete your estate plan, but you must also update the title of assets and beneficiary designation. If you don’t, you can accidentally disinherit your heirs.
This is why funding your trust (retitling and updating beneficiary designations) is so important.
The Downside of Probate
The cost of probate can be expensive. Examples of fees include:
- Court costs,
- Administrative, filing fees, and personal representative charges
- Costs to transfer property
- Executor fees
When you have several assets in different states, things get complicated really quickly. Various state laws can also add to the complexity.
This process is a public record, which means anyone can get the details.
You can go down to the courthouse and find out exactly how much money somebody has and what assets they have. And for many of us, we prefer privacy. That’s probably one of the main reasons my clients want to avoid probate. I think that’s important.
Ways to Avoid Probate
An easy way to avoid probate is to create a revocable living trust. A living trust can be changed at any point while you’re still alive.
However, once you pass, the trust becomes irrevocable. It can also be helpful if you’re trying to leave assets for a disabled child or something like that.
Transfer on Death (TOD) or Payable on Death Designations
If you have a brokerage or bank account, there’s no place to designate a beneficiary or an heir. TOD or POD allows you to add their name to the title. The money will go to the person named on the title at your death.
It doesn’t matter what your will or trust says; they’re sending it to the beneficiary you have named on the account.
Joint Tenancy with Rights of Survivorship or Community Property with Rights of Survivorship
Both of these entail adding both owners’ names to the account. Upon the death of the first party, the account immediately goes to the other person.
Having a comprehensive estate plan with a second marriage is critical. This ensures your children do not get accidentally disinherited.
Pour Over Will
Often, people think a will or a pour-over will avoid probate. That is not the case. A pour-over will enables you to pour over the assets not funded to your trust, but the estate still goes through a probate.
How Often Should You Review the Titling of Assets and Beneficiary Designations?
Most advisors recommend a review every three to five years.
Conclusion – Ways to Avoid Probate
Probate can take excessive time, is expensive, and is often complicated.
There are several ways to avoid probate, including a trust, beneficiary designation, and titling.
Until our next episode, take one action that will help you create a secure financial future and retirement you love.
Follow and Subscribe
If you love the content, please open the Apple podcast on your iPhone. Scroll down to the bottom, click five-star review, and leave a review.
Free Resource: Your Next Best Financial Step
If you are ready to know your financial house is in order so you have a secure financial future, please go to https://themillionaireinsider.com/nsf.
The number of women who were not broke or poor while working or married is staggering.
Click here to access it:
Thank you so much for joining me for
Ways to Avoid Probate on Your Assets.
I’m Annette Bau (Bah oo).
All international copyrights are reserved.
Bye for now.