USING BENEFICIARY DESIGNATIONS TO AVOID PROBATE
When a person passes, his or her assets may need to go through probate. However, there are ways in which an individual in California and most other states can keep some or all assets from going through this process. Those who own a home, car or financial asset may be able to add a beneficiary designation to these assets. It may also be possible to create a transfer on death or a payable on death designation, also known as a TOD or POD, respectively.
It is important to understand that these designations will override anything that is put in a will. Therefore, if a will says that a child receives a vehicle, this will be null and void if there is a beneficiary designation saying that another child gets it. If a person creates a TOD deed, a beneficiary will receive a home or other real estate when the current owner passes. However, the beneficiary does not receive an ownership stake while this person is still alive.
In most cases, it is possible to add a beneficiary designation to the title of a vehicle. The DMV may be able to suggest language that will be sufficient to stand up to potential legal challenges. It should only take a few minutes to create a basic beneficiary designation for a car or truck.
There may be many different ways to transfer assets without the need to go through probate. When creating an estate plan, and individual may make use of trusts, beneficiary designations and other tools to keep assets out of an estate. An attorney may be able to help create plan documents or review those that are already in existence. Ideally, an individual will review his or her estate plan every year or two or when a major life event occurs.