In the area of estate planning there are a number of myths and misconceptions that can cause people to make costly mistakes. One of the most common myths is the belief that your estate can avoid probate if you execute a Last Will and Testament. Although executing a Will is an important part of any estate plan it does not result in probate avoidance. By working with an experienced Missouri estate planning attorney you can incorporate probate avoidance strategies into your estate plan; however, it is important to dispel the widely held belief that executing a Will means your estate will not have to go through probate.
For most people, a Last Will and Testament serves as the foundation of a comprehensive estate plan. Your Will basically provides a roadmap for the distribution of estate assets by telling the probate court who you wish to receive which assets. Executing a Will doesn’t mean your estate won’t have to go through probate, it simply makes probate simpler by making it clear how the estate assets should be handled.
There are ways you can decrease, if not completely eliminate, your estate’s exposure to probate. Most of those strategies involve converting probate estate assets to non-probate estate assets. Only certain types of assets are required to go through probate. Therefore, the more non-probate assets you have in your estate the less time your estate will have to spend in probate. Some of the most common non-probate assets include:
Joint assets – assets held as co-owners, if held as “joint tenants with rights of survivorship” (or something similar), are automatically transferred to the co-owner(s) upon the death of one owner.
POD or TOD accounts – certain types of financial accounts and securities can be designated as “payable on death” or “transfer on death” accounts. This allows you to name a beneficiary who will automatically become the owner of the account assets upon your death.
Life insurance – proceeds from life insurance do not go through probate. Instead, they are paid out shortly after death to the named beneficiaries.
Retirement accounts – certain types of retirement accounts and pensions become the property of the account beneficiary upon the death of the account holder without the need to go through probate.
Executing a Last Will and Testament is an important step in your estate plan. Just remember that you will need to take additional steps if probate avoidance is an estate planning goal of yours. If you have additional questions or concerns about your estate planning, contact the experienced Missouri estate planning attorneys at Amen, Gantner & Capriano, Your Estate Matters, LLC by calling (314) 966-8077 to schedule an appointment.