When considering the best planning options for an estate plan, it is easy to feel overwhelmed. A number of options are available, and those tools allow each person to craft a plan that fits his or her unique circumstances. Still, you may worry about how to use the right planning tools for your estate.
First, you may want to consider your wishes for your estate. For instance, if you would like to minimize the probate process, you could find it useful to utilize planning options that help you keep certain assets out of probate. In particular, you may want to explore payable on death accounts.
What are payable on death accounts?
It is likely that you already have some form of payable on death account. Many bank accounts, retirement accounts, savings accounts, insurance policies, certificates of deposit and other similar assets allow for the direct transfer of funds after the account holder’s passing. Rather than having to wait until the probate process is complete, the designated beneficiary can claim the assets almost immediately after your passing.
How do POD accounts work?
As mentioned, these accounts allow for the direct transfer of assets after your passing. However, this step is only possible if you name a beneficiary to the account. If you fail to designate a person or fail to update an older designation, the account may end up having to go through the probate process to determine who is entitled to the money.
After naming your beneficiary, your account becomes POD, and after your passing, the bank will transfer the ownership of the account to the person you named. If you worry that your beneficiary will gain access to your funds before your passing, that is not the case. The beneficiary can only access the funds once the bank has transferred ownership to him or her. However, making an account POD does not protect it from creditors who may have reason to make claims against your estate after your passing.
What other tools can help avoid probate?
Though creating POD accounts is relatively simple, you may still have questions about designating beneficiaries and other ways that you could use your estate plan to avoid probate. Fortunately, you can gain reliable information that applies to your specific case from a Minnesota estate planning attorney. Having legal support as you create your plan can allow you to understand the best planning tools for your wishes.