How Do I Avoid Probate?
Probate can tie up the estate for months and be an added expense. Some states have a streamlined process for less valuable estates, but probate still has delays, extra expense and work for the estate administrator. A probated estate is also a public record anyone can review.
Forbes’ recent article entitled “7 Ways To Avoid Probate Without A Living Trust” says that avoiding probate often is a big estate planning goal. You can structure the estate so that all or most of it passes to your loved ones without this process.
A living trust is the most well-known way to avoid probate. However, retirement accounts, such as IRAs and 401(k)s, avoid probate. The beneficiary designation on file with the account administrator or trustee determines who inherits them. Likewise, life insurance benefits and annuities are distributed to the beneficiaries named in the contract.
Be careful about joint accounts, joint titling of accounts, and Payable on Death (POD) designations. The article claims that this is a way to avoid probate, but that rule does not apply in Louisiana. Louisiana’s payable on death statute does not cancel out the need for a probate proceeding. Read more about the topic at my blog post here: What Is a POD Account? A litigation time bomb.
You can name multiple persons and specify the percentage of the account each will inherit. However, payees under a POD have no rights in or access to the account while the owner is alive. You should make sure your Last Will and Testament is consistent with your POD designations should you choose to use them.
One other way to avoid probate is through the use of a Louisiana Affidavit of Small Succession. There is a narrow group of successions that might be qualified to use this procedure, but it is worth looking into. Read my blog post on Affidavits of Small Succession here: Affidavit of Small Succession in Louisiana
BOOK A CALL with me, Ted Vicknair, Board Certified Estate Planning and Administration Specialist, Board Certified Tax Law Specialist, and CPA to learn more about estate planning, incapacity planning, and asset protection.
If you liked this article, “How Do I Avoid Probate?” read also these additional articles: Have You Seen this Facebook Post? and What Shouldn’t Be Put in a Will? and Can Medicine I Take Regularly Raise My Blood Pressure? and Warning Signs an Elderly Parent is Being Scammed
Reference: Forbes (March 28, 2022) “7 Ways To Avoid Probate Without A Living Trust”