Is Your Legacy Protected From Probate?

You’ve worked hard your entire life to build your legacy. You may have built a successful career or launched and grown your own business. You may have raised children and are now even enjoying a new generation of grandchildren. And along the way, you have probably accumulated a significant number of assets.

While it may not be a pleasant exercise, now may be the time to think about how those assets and that legacy will be distributed to the next generations after your death. Without a plan in place, it may be left to the court to determine how your assets are distributed. A lack of guidance or instruction from you could cause disputes and conflict among your loved ones as they try to sort out your assets.

You probably don’t want conflict or a prolonged legal issue. One way to mitigate those risks is with a will, which is a document that gives your heirs instructions on how to distribute your assets. A will is a simple, yet powerful, estate planning tool.

A will can’t resolve every estate planning challenge, though. Even with a will, your assets may have to go through probate, which is the legal process for settling an estate. During probate, your executor and the court must pay off all debts and expenses, file outstanding tax returns, identify heirs, liquidate assets and more. It can be time-consuming and expensive.

How can you minimize the impact of probate? Fortunately, there are steps you can take to limit the amount of assets that go through probate, thus reducing delays and maximizing how much of your legacy actually gets passed to your heirs. Below are a few common strategies for minimizing the effects of probate:


Take advantage of beneficiary designations.

Assets and accounts that have beneficiary designations don’t go through probate. These include things like life insurance, annuities, 401(k) plans, IRAs and even trusts. Instead of the assets passing through probate, the insurance company or account administrator simply pays the death benefit directly to the beneficiary.

Examine your assets and consider whether they may be more effectively distributed through a beneficiary designation. You can create a trust and then place assets into the trust, or you may consider purchasing products like life insurance or annuities.

Just be certain that all your beneficiary designations are in alignment with your wishes. If you accidentally leave someone off as a beneficiary, they will likely have few options available to correct the situation.


Use joint owner titling.

Another way to avoid probate is to add an heir as a joint owner on an account or a particular asset. When you pass away, the account or asset automatically passes to the joint owner without going through probate.

Be careful, though. When you add a joint owner, they immediately get all the rights that come with ownership. They are able to take withdrawals, change investment allocations or make any other decisions you can make. Be sure you’re comfortable with your joint owner having that kind of authority.


Gift assets while you’re still alive.

Finally, you may think about distributing assets to your heirs while you’re alive. If the assets aren’t in your estate when you pass away, they likely won’t have to go through the probate process. As a bonus, you’ll get to see your heirs put their inheritance to work while you’re alive. You could help a child start a business or a grandchild fund their education.

Before you decide to gift, be sure to investigate state probate laws. Some states have rules that look back to include in your estate assets that were gifted in the several years preceding your death.

Want to maximize your legacy? We’re happy to consult with you, analyze your objectives and help you develop a legacy distribution strategy.


This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

15983 – 2016/8/5

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