Everyone wants to avoid probate – the question is how? Most of us have assets that are already considered “non-probate assets” or we can take simple steps to make them “non-probate assets”. A non-probate asset is property of an estate that is not required to pass through the probate process or any similar to it. This is simply because these assets or accounts already have a beneficiary named, making its inheritance pre-determined. The following fall under this distinction:
- An IRA, 401(k) or other retirement account;
- Transfer-upon-death bank accounts;
- Transfer-upon-death or joint tenancy real estate;
- Life insurance policies;
- Property within a living trust;
- Vehicles with a beneficiary deed.
If you have a retirement account or a life insurance policy, you might recall filling out a designated beneficiary form, indicating who you wanted to inherit that asset upon your passing. This single form turned that asset into a “non-probate asset”. In regard to your home or vehicle, if you jointly own these assets, they are automatically transferred to the other individual on the title or deed upon your passing. If you do not jointly own a vehicle or home, if you fill out a beneficiary deed or a transfer-upon-death form, and file said form with the local DMV or Clerk and Recorder, these assets become “non-probate assets”. These forms are very simple and a quick way to make your property a “non-probate asset”. If you would like more information on this topic, or estate planning in general, please contact Anne K. McMichael at [email protected] or 303-572-4200 to schedule a free consultation.