What is an "Estate"?
Updated: Jul 26
All of us have assets. Common examples of assets we own include our checking account, our car, our house, our 401(k), and more. These assets need to be "titled" to someone or something. In other words, someone or something needs to own the asset. Instinctively, a lot of assets are titled to us in our own name.
For example, it is not uncommon that your checks have your name on them or your car is titled to you as an individual. That is fine as long as you are alive and well. However, what if you happen to die or become incapacitated while you own that asset? The answer is not ideal. By law, the legal title to anything titled to you as an individual will automatically transfer to your "estate" the moment you die.
Imagine at the gates of heaven are like a TSA line. If you try to get in with any assets (or liquids), you will be forced to drop them in a budget before being allowed to proceed. The problem is the asset you are dropping in this bucket are worth a lot of money and your family could use them. Unfortunately, they now need to hire a probate attorney to help get the assets out of the estate (aka the bucket). This is a foolish way of doing things.
The much better option is to avoid probate and die with a $0 estate. You do this by naming beneficiaries for each of your assets. Sometimes this is easy. Assets such as retirement plans and life insurance offer beneficiary forms that you can complete. Even bank and investment accounts offer transfer on death (TOD) and payable on death (POD) forms. For other assets, like real estate, you need a revocable living trust to name a beneficiary. You just need to make sure that the asset is "titled" to the living trust for it work property.
At AvoidProbate, our lawyers can help you keep assets out of the estate and therefore save your family thousands of dollars on probate court fees. Just give us a call to learn more!