Probate: What you should know to plan ahead
Naming life insurance beneficiaries and other ways to avoid the process
You may have heard stories about the complexities and confusions after someone
passes away: unforeseen costs, delayed access to funds, legal battles with loved
ones. But with proper planning and organization, you can ensure that your estate is
well protected and your family easily receives their inheritance, life insurance and
Probate—the legal process for distributing assets after someone dies—can seem
overwhelming, or something that should be left to a lawyer to figure out. A common
misconception is that you can avoid probate if you have a will or small estate. The
reality, however, is that some of these assets are still subject to probate court.
Probate can be a long legal process. Often people want to avoid probate to help give
their family easier access to what they leave them. In order to determine how to
structure your assets for easy distribution, it’s important to understand which
assets are subject to probate:
Assets subject to probate:
- Individual assets—such as personal property—that are solely in the
name of the deceased
- Assets held as “tenants in common” – meaning owned property with
people other than your spouse.
Assets that are not subject to probate:
- Joint accounts such as retirement, investment, and bank accounts, and
accounts that are designated as “payment on death” or “transfer on
- Life insurance policies with a living beneficiary
Ways You Can Avoid Probate
Name beneficiaries: A good way to ensure that your non-probate assets are
distributed directly to your loved ones is by naming beneficiaries for each
account or policy. For example, a life insurance policy or retirement account with
a named beneficiary will skip probate and the cash benefit will be paid directly to
that person. Be sure to name an individual and not your estate. Assets that go
through your estate will be subject to probate.
Keep your financial accounts up to date: Anytime you experience a life event,
such as a marriage, death or divorce, it’s important to review both the primary and
contingent beneficiaries on your policies and investments. This will help ensure
your assets avoid probate and that your loved ones quickly receive the assets you
Talk with a professional: Since probate rules vary by state, it’s a good idea to
discuss your options with an estate planner or attorney. This will help you better
understand your options, what to watch out for and how you can avoid probate.
This article is provided by New York Life for informational purposes only. Neither New York Life, AARP nor its affiliates provide tax, legal, financial or accounting advice. Please consult your own professional for advice specific to your circumstances.