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Estate Planning: Avoid probate for small estates
Estate planning

Estate Planning: Avoid probate for small estates

Q: I have my daughter as beneficiary on all of my investments, however, I do not have her on my car title or my home. Is this going to be a problem when I die? My will leaves everything to her.

A: It shouldn't be a problem but there might be a better way to handle things.

Since you listed your daughter beneficiary on your investment accounts and you are concerned that she is not listed on the car or home, it appears that at least one of your goals is probate avoidance. If this is the case, you may want to consider a transfer on death (TOD) deed for the home and possibly using a TOD designation on the car title.

Remember that the will only controls probate assets. Probate assets are assets that are only in the name of the decedent and which don't have beneficiary designations. In your case, probate assets would include the home and the car because they are only in your name. The investment accounts are non-probate assets since they have beneficiary designations. This means that the will controls the home and the car but not the investment account.

If your goal is to avoid probate, that won't happen with the car and the home unless you do something.

One option is to use a TOD deed. A TOD deed essentially adds beneficiaries to real estate without creating an ownership interest. That means the beneficiary that you designate will receive the property after your death, but have no rights to it during your lifetime. 

You can also add a beneficiary designation on the car title. To do this, call the Bureau of Motor Vehicles to determine the exact language they recommend and follow their instructions and voila, a probate asset is now a non-probate asset.

With the introduction of TOD deeds and other TOD and POD designations, assets that are normally probate assets can avoid probate. All it takes is a little planning and pushing the right paper.

Finally, remember that Indiana has an informal probate process that allows the transfer of up to $50,000 worth of probate assets using what is affectionately known as a Small Estate Affidavit. With a combination of these options, an uncomplicated estate can be transferred without the necessity of probate.

Christopher W. Yugo is an attorney in Crown Point. Chris’ Estate Planning Article appears online every Sunday at Address questions to Chris in care of The Times, 601 W. 45th Ave., Munster, IN 46321 or to Chris’ information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate-planning specialist.


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