Using Your Ownership Documents to Avoid Probate on Your Assets
Probate court proceedings can take a great deal of time, money, and effort for beneficiaries and personal representatives of an estate. The process may involve submitting paperwork and death certificates to banks and attorneys, publishing notices in the newspaper, and jumping through many additional hoops before a deceased person's assets can be legally transferred to the beneficiaries. Fortunately, there are a few simple steps people can take during their lifetimes to transfer their homes, wealth, and property directly to the next owner.
How Joint Ownership and Transfer Documents Affect Probate
If you want to legally transfer ownership of property, one of the best ways to avoid probate is to transfer all of your assets into a living trust. In New York, living trusts can prevent probate on nearly any type of asset you own—from funds in bank accounts to vehicles and real estate.
While trusts offer an easy way to control which assets will go through probate, New York law allows certain assets to pass directly to a joint owner or beneficiary. By making simple changes on your ownership documents, you may be able to skip probate on your:
- Home. Any property that is owned by more than one person and includes a "right of survivorship" should automatically pass to the surviving owner when the other owner dies. Although probate will not be necessary to transfer the property, the surviving owner may have to prove that he or she is the only person with the right to hold title. New York laws allow homes and real estate to be passed without probate if there was joint ownership and each tenant held an equal share of the property. However, if the surviving owner passes away and he or she did not add another owner on the deed, the property will have to go through probate at that point.
- Bank accounts. New York residents can add a "payable-on-death" (POD) designation to their bank accounts—including checking and savings accounts or certificates of deposit. This allows the funds to pass directly to the listed beneficiary without probate. The beneficiary does not have any control of, or rights to, the funds in the account during the owner’s lifetime. The bank will likely require a copy of the owner’s death certificate in order to transfer or release the funds.
- Stocks and bonds. Similar to a POD designation is the “transfer-on-death” (TOD) deed, and it is up to each state to decide which assets can be transferred this way. New York does not allow transfer-on-death deeds for the transfer of vehicle registrations or real estate, but it does allow TOD registrations for stocks and bonds. While the named beneficiary automatically inherits a TOD account at the owner’s death, the new owner will need to contact the brokerage company to legally transfer the account.
- Real estate. If you have real estate holdings in addition to your home, you can avoid probate by using the IRA trust company as your real estate custodian. In order to do this, all property purchases must be funded by, and titled to, your IRA trust company. You may also be able to pass on real estate directly if you create a corporation or LLC to control those assets during your lifetime.
As experienced estate planning attorneys, we know the benefits and disadvantages of each way to title and transfer property. That is why we carefully examine each document in a client’s estate plan to ensure there are no surprises—allowing your executor to sail through probate with due respect paid to your final wishes. Additionally, if you have been named as the executor of someone’s estate, we can help walk you through administration to make the process as painless as possible. Contact us today through our online form to set up an initial consultation with a probate attorney.
Related Links:
- Benefits of Going Through Probate When It Is Not Required
- An Overview of the Probate Process in New York
- How Estate Administrators Are Appointed in New York
