How to Avoid Probate on Bank Accounts Process?
The process of probate can be expensive and time-consuming. Learn how to avoid probate on bank accounts and other assets with help from Wood Law Group.
What is Probate?
Probate refers to the legal process by which an asset or property is transferred from the deceased’s possession to his beneficiaries or heirs.
Many situations in which an account owner dies with money in their account require probate to disperse the funds to their heirs or other beneficiaries.
The reason is that under normal circumstances, you would need the deceased’s signature to transfer funds. Without that signature, the probate court steps in to ensure funds are appropriately transferred after the account holder’s death.
Probate can be a lengthy process, so it is helpful to establish an attorney-client relationship with skilled and experienced Las Vegas Probate Lawyers as soon as possible. With some strategic planning from the attorneys at the Wood Law Group, you could potentially avoid probate altogether.
What Are Some Reasons to Avoid Bank Account Probate?
While probate can often be straightforward, many prefer not to go through it. Some of the reasons people avoid probate include:
1. It could be slow – In certain situations, it can take the probate court years to finalize a case, mainly when it involves a contested or complex will.
2. It is very public – Given that it is a legal proceeding, matters in probate court tend to go out and are preserved in the public record.
3. It can be costly – While expenses vary from state to state, many states usually have administrative expenses, attorney costs, and executor fees as probate costs.
Given the drawbacks of the probate process, it is critical to work with a reputable law firm if you are interested in avoiding probate.
Contact the Wood Law Group today as we provide all probate services that families, spouses, children, and any other family member or beneficiaries of the deceased may need.
Do Bank Accounts Have to Go Through Probate?
Whether an account will go through probate usually depends on whether it was a joint account or in the deceased’s name. Like real estate and property, bank account ownership can take several forms.
If an existing account was in the control of two people or more individuals, there would be a right of survivorship, which means the surviving spouse, children, or other beneficiaries will inherit the account without probate.
The surviving owner will have the account ownership and assets of the deceased person once the account holder dies. This happens to joint account holders after the death of an owner.
Similarly, if an account was held only in the owner’s name but with a beneficiary designated, the latter could go to the bank and claim the money in the account without needing to go through the probate process.
If you want to transfer your fund to someone after your death but not in your life, then you can set up your account as a Payable on Death account (POD).
Conversely, an account will typically have to go through probate if the account is in the deceased’s name with no beneficiary or co-owners.
If you need advice on how to go about probate, contact the Wood Law Group, a professional law firm in Las Vegas, NV, to get the assistance you need. Our attorneys can provide an initial consultation on your case and get started understanding your needs today.
Working with an experienced attorney will help you know the details of personal finance, social security administration, transferring funds, and securing your family members with better planning.
What is the Bank Account Beneficiary Probate Process?
Creating an estate plan can be a complicated process that feels overwhelming for those involved. The good news is that you can follow a few simple rules to set up a plan that will transform your account into a payable-on-death (POD) account with beneficiaries.
Who Can Be an Account Beneficiary?
Before you create your POD designation, you must determine who will be the account’s beneficiary and submit the beneficiary designation form. This could be anyone from your best friend, to your spouse, to your children. It is even possible to designate several beneficiaries to a bank account.
Some financial institutions may require that you fill in forms that ask for the Social Security number of the beneficiaries. This would mean you have to contact them and inform them of what you intend to do.
You can also designate nonprofit organizations and charitable groups as account beneficiaries, as long as they are recognized as charitable organizations by the Internal Revenue Service.
Limited liability companies, partnerships, and corporations cannot be designated bank account beneficiaries.
What Are the Rights of a Beneficiary?
As long as you are alive, you control your bank accounts and can close the account, spend money and even change beneficiaries. Your account will continue to operate just as it did before you designated a beneficiary.
The beneficiary will typically not have rights to the money in the account until your decease. The financial institution may refer to this type of account as an “in trust for” or ITF account.
At your death, the account will become the property of the beneficiary. The bank or other financial institution will require a death certificate to verify your passing and will then process the account according to your wishes.
The beneficiary will have the right to close the account and may be able to withdraw all the money from it, depending on the account type. They may also have the right to keep the account open and continue to use it.
When Can an Account Beneficiary Claim Account Assets?
A beneficiary has the right to collect any funds in the account after your decease but not during your life.
All they would need to do is head to the bank with proper identification and a certified copy of your death certificate.
The institution will then require them to complete a few forms, after which the money in the account will be transferred to them. Depending on state laws, there may be a short waiting period, and creditors may have a right to settle their debts first.
Given the risks involved in the probate process, it is often preferable to avoid them by working with a probate attorney.
By working with a Las Vegas asset protection attorney from the Wood Law Group, you can potentially increase the control you have over your final wishes and the funds in your account.
Contact us today to spare your spouse or children the burden and stress of prolonged probate processes.
What Are a Probate Bank Account and Joint Accounts?
Property jointly owned is usually passed to a surviving owner if they have the right of survivorship.
Conversely, if tenants have a joint tenancy in common, each person’s interest will be distributed according to the estate plan crafted by the deceased before his death.
For instance, if one of two business partners dies, their co-owner’s share will typically flow to her beneficiaries rather than her surviving partner.
If you have an account held jointly with your spouse with the right of survivorship and you pass on, your spouse, who is the surviving co-owner, will then become the sole owner with a right to the funds in the account.
In general, you can avoid probate in joint bank accounts by establishing:
- Transfer on Death (TOD) accounts, otherwise known as beneficiary deeds.
- Payable on death designation (POD) accounts
- Joint accounts with right of survivorship
These types of accounts will avoid probate as the assets are transferred directly to the beneficiary when the account holder dies.
Will Banks Release Money Without Probate?
Banks typically release money up to a certain amount without requiring the beneficiary to go through probate.
Still, it is essential to remember that each institution has its limit on whether you need probate or not. Moreover, each institution will also have its own rules on whether the threshold is to be applied to only the account balance or the estate’s overall value.
Some financial institutions and banks require that beneficiaries go through probate for a set minimum balance. In contrast, some state that you need probate for a minimum total estate value.
It is also important to note that the final decision will thus be up to the bank, which has the authority to request that probate be conducted before releasing any bank balances, even if the value is below what is stated in their items as the threshold.
Contact the Wood Law Group today for professional legal advice. We have worked on all probate cases and use our experience garnered over the years to help clients ease the estate process after a loved one passes away.
How to Avoid Bank Probate
Regardless of the reasons you intend to avoid probate, there are several steps that you can take. These include:
Have a Small Estate
States have an exemption floor so that a small estate may be deemed below the threshold. You can check the limits in your state for what the level is.
Give Away Assets Early Enough
You might avoid probate by giving away most of your funds before death. This will not only reduce the chances of a probate process but might also eliminate or reduce future state and federal taxes.
Make Accounts Payable on Death
Bank accounts payable on death will usually go directly to the designated beneficiary upon your death without having to be subjected to probate.
Establish a Living Trust
Assets held in trust are not part of your estate upon your death. You will typically be a trustee of the funds in the trust and be required to distribute the money under the terms you set out in the agreement.
Have a Joint Bank Account
Making a spouse or other beneficiary a joint owner makes it possible for the funds in the account to be transferred without needing probate. Some ways to make someone a joint owner include tenancy by the entirety, joint tenancy with right of survivorship, and community property with right of survivorship.
Use a Transfer on Death Deed
You may be able to use a transfer on the death deed to avoid probate for certain types of property, including real estate and vehicle titles in some states.
There are many reasons to avoid probate, including the cost, the speed of execution, and how public it can be.
Consult With Us
Working with a lawyer during or before the probate process can help you get up to speed on relevant regulations, including the state limits on probate accounts, what type of account to have, the rights of the beneficiary, and how to avoid probate.
The Wood Law Group has a proven track record in probate law and is here to help you every step of the way. Our knowledgeable attorneys will help ensure that your assets are distributed in accordance with your wishes and in a timely manner.
Contact us today to schedule a consultation.