Ways to Avoid Probate Nightmares Part 2

Here are six suggested will substitutions to consider in order to avoid probate nightmares:

1. Annuities: Death benefit annuities are accounts that pass to named beneficiaries and are tax-deferred. While this process avoids probate, there area associated estate tax inclusions for valuation purposes. The beneficiary has a choice between receiving a lump sum payment, or receiving monthly annuity payments. These payments, either one, could be subject to income tax.
2. Joint tenancy: The right of survivorship allows the person with joint ownership to take over full ownership of property upon your death. This is in cases when properties are owned by two more individuals, each having equal ownership of said property.
3. Pay on death accounts: Following your passing, your bank accounts will transfer through a pay on death account situation. This is simple form your financial institution will provide for you in order to name the person to whom the funds in the account should be transferred. This form does not provide this named person any rights to your account until your passing. Upon your passing, the named individual must show your death certificate and their identification prior to receiving funds.
4. Registered securities: Check with your estate planning attorney to see if your state has adopted the Uniform Transfer-on-Death Security Registration Act. This act allows you the right to transfer ownership of your brokerage accounts, bonds and stocks to a beneficiary without going into probate court. This is another simple form you fill out naming the beneficiary. Like with pay on death accounts, you are not giving up any rights to your assets and the named beneficiary does not gain any rights to them until your passing.
5. Retirement accounts: Confer with your estate planning attorney regarding the best retirement account to suit your overall plans. However, in the case of a Roth IRA, the account continues to accumulate interest until the time of your passing, this interest is tax-free, and there are no mandatory withdrawals required to maintain the account. Beneficiaries listed must present your death certificate, as well as their identification in order to receive funds. No probate is involved in this situation.
6. Revocable living trusts: These assets and properties are transferred to the trust while you are still alive. Then, once you pass, these items are passed on to the beneficiaries listed on that trust. The court does not have to be involved in this process at all. Trust administration is conducted by the successor trustee.