Sometimes Probate is required even though you tried to avoid it.
Draw a circle; consider the circle to represent everything you own—your house, car, recreational vehicles, bank accounts, investments, insurance policies, IRAs, retirement accounts, etc. The property within the circle is known as your estate.
There are many ways property in your estate may be transferred to those you designate. For example, you can sign a Pay-on-Death request with your financial institution making your account payable to one or more payees at your death. You can hold property with someone else as joint property or community property with a right of survivorship, so that upon the death of one party, the property automatically belongs to the surviving party. Additionally, your estate can be probated to transfer your property to the persons designated in your Will.
Sometimes people go to great lengths in their planning to avoid probate. Then, after they have passed away, the family discovers that their loved one designated their Estate as the beneficiary or failed to designate a beneficiary, therefore, the death benefit is paid to the Estate.Insurance companies will not give money to the Estate without an order from the Court. Therefore, the family is frustrated when they find out that after all their loved one’s efforts, a petition for probate will need to be filed and a personal representative appointed to receive the death benefit from the insurance company.
Working with insurance companies can be confusing, frustrating and time consuming; however, when you are doing your estate planning it is wise to review your beneficiary designations on insurance policies and investments to avoid this problem.
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.