There are many risks that can arise during the probate process. Families may fight over particularly valuable property within the estate. Creditors may make claims that require the liquidation of certain assets. High-value estates are also potentially at risk of costly estate taxes.
People creating or reviewing their estate plans often want to limit the likelihood of probate conflict. Keeping as much of their property as possible out of probate court can be a key aspect of that process.
Well-funded financial accounts can trigger conflict among beneficiaries or become the target of creditors. A simple document filed with banks or financial advisors can help keep financial resources out of probate court.
Account transfers can bypass probate requirements
People with sizable bank accounts or investment accounts can potentially keep those accounts out of probate court after they die. They achieve that goal by arranging in advance for the account to transfer directly to a specific beneficiary after their death.
A transfer-on-death document kept on file with a financial institution or professional could allow a beneficiary to assume ownership of an account when they have proof that the prior owner passed and valid government identification. Doing so prevents the account from becoming part of an estate and being subject to probate court oversight.
A thorough estate plan may include a variety of documents and even paperwork filed with financial institutions to preserve resources and uphold a testator’s legacy after they pass. Minimizing what passes through probate court can minimize the likelihood of frustrating probate complications, including litigation, creditor claims and tax obligations.