Keeping things simple for loved ones is the number one request I hear from my estate planning clients. This is part one of a short series designed to highlight some easy estate planning tips that can help keep things simple for families at the time of a loved one’s death.
What is Probate?
In a nutshell, when a person dies, their property is known as an “estate.” With a little simple planning, most if not all estate property can pass directly to the intended beneficiary (ies) without going through probate. Probate is the court process designed to divide property and pay final expenses at death. The problem with probate is that it can be complicated, lengthy, and expensive.
Designating a POD Account
Funds held in bank accounts can be normally be kept out of the probate process by designating bank accounts as “pay on death accounts.” Clients simply notify their bank of who they would like to inherit the funds in the account upon their death. There is no limit on the amount of money, the money is quickly transferred at death, and designating a beneficiary costs nothing. While the account owner is alive, the beneficiary has no right to the funds-only at death will the funds be paid. This piece of planning can easily be done by an individual on their own, or with a little assistance from a legal professional. It is important to remember that your legal obligations to a spouse, or creditor, cannot be avoided by the use of a POD account; however, for most, this does not present an issue.