Avoiding Hassle During Probate Requires More Than Just Designating Beneficiaries for Non-Probate Assets

Estate planning lawyers often talk up non-probate assets, such as accounts with transfer on death (TOD) and payable on death (POD) beneficiaries, as a “set it and forget it” way to simplify your estate plan.  Of course, if you have started on your estate plan, you know that nothing involving the transfer of property from one generation to the next is as simple as it seems.  You can write a legally valid will, and the court will enforce it, but your creditors still have a chance to claim some or all of your property, which can make their status as beneficiaries of your will seem like cold comfort to your heirs.  Transferring property to your heirs outside of probate is an admirable goal, and your heirs will certainly appreciate you sparing them the hassles of probate.  Despite this, just because an asset does not have to go through probate to get to the beneficiary does not always mean that the beneficiary can receive the property easily, or that it is a good idea for the beneficiary to receive a lump sum.  For help being strategic about the non-probate transfer of assets, contact a Dade City estate planning lawyer.

Not Everyone Is in a Good Position to Receive a Non-Probate Asset

Life insurance policies are among the most accessible non-probate assets.  For a low yearly or monthly payment, you can give the beneficiaries a lump sum payout that vastly exceeds what you paid over the time you held the policy.  The beneficiary of your life insurance policy can be anyone who depends on you financially, but it is usually a close relative.  If the beneficiary is a minor, it cannot go directly to the beneficiary until he or she reaches adulthood.  Instead, the money must be held by someone else subject to oversight by the courts until the beneficiary is old enough to have direct control over it.  Likewise, if the beneficiary is an adult who receives public benefits because of his or her disability could lose his or her benefit eligibility upon receiving your life insurance payout.  An even more common scenario is that the beneficiary is an adult who does relies on Medicaid or other forms of public benefits  but whose financial situation is precarious.  A one-time payment might cause them to be ineligible for benefits and cost them far more than they will receive.  The same problems exist with TOD and POD accounts, which also pay a lump sum.

A trust is the safest way to transfer property to minors and to financially vulnerable adults.  The trustee can pay the money in monthly or yearly installments on behalf of the  beneficiaries according to the instructions that you indicate in the trust instrument.

Contact a Florida Estate Planning Attorney About Transferring Property Outside of Probate

An estate planning attorney can help you get the maximum benefits out of non-probate assets while avoiding the pitfalls.  Contact The Law Office of Laurie R. Chane in Dade City, Florida to discuss your case.

Source:

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