Pure’s Senior Financial Advisor, Kyle Stacey, CFP®, AIF®, covers three of the main tools that can help keep your assets out of probate court altogether.
Transcript
Probate is the court process your estate goes through after you pass away, and it can be a slow, painful, and public process. But there’s good news that there are things you can do to avoid that. Today, I’m gonna be covering three of the main tools that can help keep your assets out of probate court altogether.
So things like trusts, titling, and how your beneficiary designations are set up. So let’s start with the big one, the revocable living trust. When you set up a trust, you transfer the ownership of your assets, things like your home, investment accounts, whatever you choose, into that trust. You still control everything during your lifetime, but because the trust technically owns the assets, not you personally, there’s nothing for probate court to touch when you pass away.
So your named successor trustee just simply steps in and distributes the assets according to your instructions. There’s no court, there’s no waiting period, no public record. Then you can title your assets very specifically. So how they’re titled matters just as much as what is in your will. So if you own a home jointly with rights of survivorship, it can pass directly to the co-owner the moment you pass.
Bank and brokerage accounts can often also be titled as transfer on death, or TOD. Vehicles, real estate, some states also allow for transfer on death designations. So the key is just checking every account and asset that you own and making sure the titling actually reflects your wishes. And then finally, the beneficiary designation.
So retirement accounts, life insurance policies, annuities, all pass directly to whomever you’ve named as the beneficiary. They skip probate entirely, even regardless of what is in your will. So it’s very powerful, but it’s also a very common mistake if you haven’t reviewed your beneficiaries in years.
After a marriage, divorce, a new grandchild, your accounts could end up going to the wrong person. So just a quick annual check can save your family a lot of confusion. So if you don’t have all this information in one place, you can take a moment, download the Estate Plan Organizer. It’s a free resource that will help you collect all your relevant estate records so that you and your beneficiaries, your heirs, can better track all of the important information in your life.
And if you want a second set of eyes on your estate plan, feel free to reach out to Pure Financial Advisors to take advantage of our free financial assessment
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- Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
- Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
- Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
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- Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® – The CERTIFIED FINANCIAL PLANNER® certification is by the CFP Board of Standards, Inc. To attain the right to use the CFP® mark, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. 30 hours of continuing education is required every 2 years to maintain the certification.
AIF® – The AIF® designation, administered by the Center for Fiduciary Studies fi360, certifies that the recipient has specialized knowledge of fiduciary standards of care and their application to the investment management process. To receive the AIF Designation, the individual must meet prerequisite criteria based on a combination of education, relevant industry experience, and/or ongoing professional development, complete a training program, successfully pass a comprehensive, closed-book final examination under the supervision of a proctor and agree to abide by the Code of Ethics and Conduct Standards. Six hours of continuing education is required annually to maintain the designation.
