Some people have invested consistently throughout their careers. They may own stocks, physical commodities, like gold, and even real property. They may also have well-funded savings accounts and retirement accounts.
Financial resources can quickly become a point of contention during estate administration. Family members may fight over financial resources, while outside parties, including creditors, may try to lay claim to those assets.
The value of financial resources can also put an estate at risk of estate taxes. Keeping financial accounts out of probate court is one way to preserve those resources. There is a simple solution available for many well-funded financial accounts.
People can plan for an immediate transfer
Most assets included in an estate must pass through probate court prior to their distribution to beneficiaries. Testators thinking about the support of their loved ones and their legacy after they pass can sometimes arrange to keep specific resources out of probate court.
Moving assets to a trust is sometimes an option. Other times, people arrange for assets to transfer directly to specific beneficiaries after their passing. Transfer-on-death designations filed with financial institutions allow specific beneficiaries to take control of financial resources without waiting for the probate courts.
Transfer-on-death designations permit named beneficiaries to present identification and a copy of the death certificate to financial institutions and become the new owners of financial accounts. Standard checking or savings accounts, investment accounts and retirement accounts can all potentially bypass the probate courts with the right paperwork.
Looking into ways to transfer resources without risking tax complications, probate delays or creditor claims can be helpful for those creating estate plans. Testators with financial resources may have several options available to ensure the right people rapidly gain access to the accounts they have funded throughout their lives after their passing.