Protecting Your Family from Delays, Costs, and Headaches
When someone passes away, their assets don’t automatically go to their loved ones. In many cases, they must first go through probate, the legal process of validating a will, settling debts, and distributing assets. Probate is public, often time-consuming, and can cost thousands of dollars in attorney fees, court costs, and delays. The good news? With thoughtful planning, probate can often be minimized—or avoided entirely.
What Is Probate, Exactly? Probate is the court-supervised process of:
- Proving a will is valid (or handling intestacy if there is no will)
- Appointing a personal representative or executor
- Identifying and valuing assets
- Notifying creditors and paying debts
- Distributing what’s left to beneficiaries
Depending on your state and the size of your estate, probate can take months and, in many cases, longer than one year.
Why Do People Want to Avoid Probate?
- Time: Probate can significantly delay the distribution of assets.
- Cost: Legal fees, court costs, and executor fees can take a big bite out of the estate.
- Privacy: Probate is a public process. Anyone can view the court file, including details about your assets and beneficiaries.
Strategies to Avoid Probate
The right tools depend on your assets and goals, but common probate-avoidance techniques include:
1. Revocable Trust (aka “Living Trust”)
Assets titled in the name of your revocable trust avoid probate altogether. You retain full control during your lifetime, and after death, your named trustee distributes assets privately, without court involvement.
2. Beneficiary Designations
Assets such as retirement accounts, life insurance policies, and some bank or brokerage accounts allow you to name beneficiaries directly. These beneficiary-designated assets transfer automatically upon your death, bypassing probate.
3. Transfer-on-Death (TOD) or Payable-on-Death (POD) Designations
If an asset is jointly owned with survivorship rights, it passes automatically to the surviving owner. Be careful, though—this can create tax or legal complications if not properly planned (similar to TOD/POD Designations)
- The TOD or POD Designations Override Your Will by Creation of a Separate Distribution Path
- Using TOD/POD can cause your estate plan to become fragmented if not coordinated.
- This may result in unintended unequal distributions if most assets pass outside your will or trust.
- If you don’t name contingent (backup) beneficiaries, and your named beneficiary dies first, the asset may end up in probate anyway.
- No Oversight or Conditions
- Unlike a trust, TOD/POD transfers happen outright, with no restrictions or controls.
- This may be a concern for:
- Minor beneficiaries (creates need for a conservatorship)
- Beneficiaries receiving government benefits (e.g., those who need a special needs trust)
- If a will, trust, or family expectation contradicts a TOD/POD designation, it may cause confusion or even litigation, especially if one child receives a disproportionately large asset.
- You Can’t Coordinate Tax Planning
- TOD/POD designations don’t allow for tax planning tools such as disclaimer trusts or other structured strategies, which can save up to $100,000.00 in Oregon estate tax for married couples.
⚠️ Common Mistakes to Avoid
- Forgetting to fund your trust. A trust only avoids probate for assets titled in its name.
- Failure to update beneficiary designations. Outdated forms can cause unintended consequences—or even litigation.
- Overzealous Use of Transfer-on-Death or Pay-on-Death accounts – If your will leaves everything equally to three children, but your POD account lists only one child as beneficiary, only that child gets the account.
- Assuming a will avoids probate. It doesn’t—a will goes through probate.
What Next?
If your goal is to reduce court involvement, save money, and spare your loved ones unnecessary stress, avoiding probate is one of the most important reasons to have an estate plan.
Whether you’re starting from scratch or unsure if your current plan will actually work as intended, Catalyst Law can help you put the right tools in place.
Need help avoiding probate? Let’s talk. A brief consultation now can save your family months of hassle later.