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3 Ways to Keep Your Estate out of Probate

By Wendy Connick – Updated Mar 3, 2017 at 7:23AM

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Save your loved ones a lot of hassle and expense by taking steps now to protect your estate from probate.

Grandfather carrying grandson on his shoulders


Unless you're a lawyer, there's nothing good about the probate process. Probate is basically a drawn-out clerical process meant to confirm that the deceased's will is being honored. Unfortunately, a simple will can't always protect a person's assets from the probate process, which can involve months of filling out forms and meeting procedural requirements -- all while racking up legal fees that may reach well into the thousands.

If this doesn't sound like your cup of tea, consider using the following methods to protect your heirs from the pain of probate.

Set up a living trust

Living trusts are the most comprehensive, but also most complicated, way to protect your estate from probate. A living trust requires three people: a grantor (the person setting up the trust), a trustee (the person who manages the trust), and one or more beneficiaries (the people who benefit from the trust). In a trust set up for the purpose of avoiding probate, typically you would be all of these people. As a grantor, you'd set up the trust and transfer your property over to the trust's ownership; as a trustee, you'd manage how that property is handled; and as a beneficiary, you'd continue to use that property as your own during your lifetime. You'd also add whoever you want to inherit your property as beneficiaries to the trust. Finally, you'd need to add a successor -- the person whose job it is to take over the trust after you die and make sure that your property is distributed according to your wishes.

Money under an umbrella


A living trust protects your estate from probate because, technically, you don't own the assets in it; the trust owns everything, and you just use it. If you own nothing when you die, then there's nothing to put through the probate process.

To get a properly configured living trust of your very own, seek out a lawyer who has experience with trust and estate law to help you set it up. If you're the do-it-yourself type, you can draw up the documents on your own (trust-building software and kits are available from numerous vendors, including Nolo), but it's best to at least ask a lawyer to review it before you file the paperwork so that you can be sure you haven't missed some crucial detail.

Use joint ownership for your property

If you and someone else both own an asset and the joint ownership is structured correctly, then the asset will simply pass straight to the other owner when you die. Many married couples already have joint ownership in major assets such as bank accounts and houses. However, the ownership may not be the right kind to ensure you'll avoid probate.

What you typically want is "joint tenancy with right of survivorship," which means that when you die, the other owner will fill out a simple form, and the property will pass straight to them. If you're not sure whether you have that form of ownership, check with the agency keeping the records. Typically, that means your bank for bank accounts, the Department of Motor Vehicles for your car, and the county real estate records department for your house.

Some states have laws that will affect how joint ownership works. For example, if you live in a community property state, you can choose an even simpler form of joint ownership: community property with right of survivorship. Under this form of ownership, when one owner dies, the other automatically gets ownership of the property without even needing to fill out a form. And in Texas, you'll have to fill out a separate written agreement to establish joint ownership for any asset. Consider doing some research or checking with a local legal advisor to see if any other state or local laws will affect how joint ownership works for you.

Convert your accounts to payable-on-death

It's possible to add a beneficiary to many types of properties and assets. If you do, then the asset will go straight to the beneficiary upon your death, without taking a tour through probate court first. This is typically referred to as "transfer-upon-death" or "payable-on-death," depending on the type of asset.

Many retirement accounts ask you to name a beneficiary at the time you open the account; upon your death, the beneficiary can claim whatever funds are in the account. Similarly, you can name a beneficiary for your bank accounts at any time, and the beneficiary can claim those funds after your death just by going to the bank with a copy of your death certificate and proof of their identity. Most states will allow you to name the beneficiary on investments such as stocks and bonds; this works just like a payable-on-death bank account. And some states will let you set up transfer-upon-death registrations for vehicles and/or deeds for real estate. Check with your state's Department of Motor Vehicles and your county's real estate records department to find out if it's an option where you live.

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