There are valid ways to transfer property and
avoid probate. Some of these are:
Pay on death accounts can be created using a simple form at your bank. It is an easy way to set up an informal revocable trust. All you do is designate a beneficiary(s) that you want to receive the money in your account when you die.
Most banks do not charge extra for this type of account. You can include any kind of bank account, such as checking, savings, money market, etc. The beneficiary has no right to your account during your life. You can withdraw the money, close the account, or change beneficiary. Be sure to check with your bank before opening this type of account. Some state laws require that you inform the beneficiary first.
Joint tenancy is another way you can avoid probate. This is a way of holding title to property. You can put real estate, or any of your bank accounts into joint tenancy. This is a simple and efficient way for two or more people to hold title to property. When one person dies, the surviving joint owner(s) automatically gets ownership. This avoids probate, but has many pitfalls such as, loss of property to judgement creditors and loss of control.
You should check with your state law concerning joint tenancy. A few states restrict joint tenancy to husband and wife only. Remember this: Once you decide to put your property in joint tenancy, you cannot change your mind. The other person becomes owner of half your property. If the other person gets into financial trouble, you could lose your property.
Life insurance avoids probate by designating a beneficiary to receive cash. A retirement or pension plan also designates a beneficiary and therefore avoids probate.
The best estate planning method by far is a revocable living trust. You avoid probate, keep control of your property during life, and can cancel or change beneficiary at any time.
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