Do certain assets, other than those titled to living trusts, also avoid probate?
Some assets do avoid probate even without the use of a living trust. These
- Property held as tenants-by-the-entirety (TBE) or as joint tenants with
right of survivorship (JTWROS). Full ownership under these arrangements
automatically pass to the surviving owner.
Payable-on-death (POD) bank accounts are available in several, but not
all states. Upon the owner’s death, the proceeds go directly to
the named beneficiary and bypass probate. The beneficiary may not access
the funds before the owner’s death; neither need he be aware of
the account prior to the owner’s death. These accounts are also known as
- Transfer-on-death (TOD) securities are also available in several states.
Securities are transferred on death if these securities are registered
appropriately, and the beneficiary provides a certified death certificate
and a signature guarantee.
- Life insurance proceeds with a named beneficiary. However probate is not
bypassed if the beneficiary is the estate.
- Retirement plans with a named beneficiary, unless the beneficiary is the estate.
These assets may or may not be creditor protected in a particular state,
and in the event of litigation further steps may be necessary to shelter
them. Also, it is often wise to designate a trust to be the beneficiary.
This prevents waste of the asset in the event the monies are left outright
to a spendthrift beneficiary.