If you don't establish a trust, you can avoid probate only if you own all of your assets in non-probate form.
Non-probate assets include the following:
- Life insurance policy with a specific beneficiary designation (other than your estate); this passes to the beneficiary by contract.
- Retirement plans or IRAs with a specific beneficiary designation (other than your estate); this also passes to the beneficiary by contract.
- Certificates of deposit, bonds, and other bank and/or brokerage accounts that are owned in your individual name, but have a POD or TOD (payable or transferable on death) designation to a named individual on each of them; this passes to the beneficiary by contract.
- Real property owned in joint tenancy with right of survivorship. The property passes to the surviving join tenant by operation of law; however, the surviving joint tenant must usually also record an Affidavit to that effect, along with a certified copy of the other join tenant's death certificate. When the surviving join tenant dies, a probate will be needed in order to clear the title from the surviving joint tenant to his/her devisees or heirs.
- Real estate to be transferred to a named beneficiary in a Transfer of Death Deed. You must execute and file the Transfer of Death Deed in the county records. This procedure is revocable until your death and is subject to acceptance by the beneficiary; if the Deed is not accepted, the property would end up in probate.
Beware, however, that it is very easy to miss just one asset that becomes payable to or is owned by your estate, and a probate is then required to transfer that one asset. Think of a car title, for example.
To discuss which estate planning documents are right for you, please contact me for a consultation.
Grayson P. Van Horn is an attorney at law serving Oklahoma residents and property owners.
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