8 Ways to Avoid Probate

Is it worth your while to avoid Probate?

If you are interested in avoiding probate, you might want to check out Mary Randolph’s, J.D. book “8 Ways to Avoid Probate.” If you own property at your death, probate offers an orderly process to transfer that property to others. However, there are ways called nonprobate transfers to pass property to others without going through probate. Here is the list from Mary Randolph’s book:

1. Set up a Pay-On-Death (POD) account. This is done by signing a form provided by your financial institution or bank, designating to whom you want your checking and savings accounts to go to at your death.

2. Name a beneficiary for your retirement account and for your stocks and bonds. Again, you do this by designating your beneficiaries on a form provided by your financial institution.

3. Transfer of Vehicles at your death. In Idaho, there is no law allowing you to set up a transfer on death of your vehicle to another person. Some people create a joint ownership with the right of survivorship by putting their adult child’s name on the title to the vehicle. This can be risky because a creditor could sue the child and take the child’s interest in the vehicle. If your estate is small enough, your heirs can transfer the title to the vehicle by filing a small estate affidavit with the county assessor.

4. Transfer of Real Estate. Real property, such as a house, can be transferred to a spouse without going through probate if the couple holds the title to the property as Community Property with a Right of Survivorship. In addition, real property can be transferred by deeding the property to a person, but retaining a life estate in the property. This allows the person to continue living in the house until their death, and then title is transferred by recording a death certificate.

5. Hold property in as Joint Tenancy. This usually refers to setting up checking or savings accounts as joint tenants with a right of survivorship. When one of the account holders dies, the money in the account passes to the survivor. This works well with a spouse; however, if you put an adult child your account to help you pay bills, it may not be your intention for the child to have the money in the account at your death. This issue has led to many court cases to determine what the person’s intent was, when they put their child’s name on their account.

6. Create a Living Trust. When you create a trust, you transfer all of your property into the Trust. When you die, there is no probate because you own no property. The terms of the trust determine how the property passes at your death. This avoids Probate, but be aware that Trusts must be managed, and over time as things are acquired, they must continually be put into the trust–it does not happen automatically.

7. Small estate procedures. If the total value of all your assets in your estate is less than $100,000, your heirs can claim the property by filing an affidavit with the person or institution that has the property belonging to your estate. This refers to anything but real estate.

8. Make a gift. Property you give away before you pass away does not go through Probate. However, you should never give away property that you might need. There are also Medicaid rules about giving property away, that could prevent you from being eligible for Medicaid if you have given away property in the previous five years.

Avoiding probate is only one of the factors you should consider in planning how to transfer your property at your death. A Will does require Probate, but in Idaho it is a fairly simple process. It’s a good idea to seek legal advice so that your unique situation is handled the best way for you!

Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity.  If you have a question about a Senior’s legal, financial or healthcare needs, please call us, 208-785-5600.

May 2017