In Tennessee, if you have a will but not a trust or if you die without a will or trust at all, your estate will be probated. However, probate can be a costly and time-consuming process. Many people in the McMinnville area will want to keep their assets out of the probate process. Fortunately, in Tennessee, not all assets will be probated.
Payable on Death (POD) or Transfer on Death (TOD) accounts
One type of asset that will not be probated are bank accounts that have a designated beneficiary on a Payable on Death (POD) or Transfer on Death (TOD) document. This designation can be made during your lifetime, and upon your death, the funds in these accounts will go directly to the named beneficiary.
Homes or land owned jointly
If you own a home or land with another person (such as a spouse) as joint tenants, this property may avoid probate. When you die, your spouse or the other joint owner of the property will own the property entirely, bypassing probate. This allows the joint tenant to do whatever they want with the home after your death, so you will want to think carefully about what this means for you, especially if it is your second or third marriage or you have children from a previous relationship.
Life insurance policies or retirement accounts
If you have a life insurance policy and/or retirement accounts that name a beneficiary, these accounts may go directly to the beneficiary, bypassing probate. Some retirement accounts that may qualify for this benefit include IRAs, 401(k)s or annuities.
Revocable living trusts
If you have a revocable living trust, this document will state who is to receive your estate assets, and the assets in the trust will bypass probate. Keep in mind that you need to transfer ownership of these assets to the trust (fund the trust) for these assets to avoid probate. In addition, only the assets in your trust at the time of your death will be distributed to your trust beneficiaries. After all, you cannot bequeath assets that you do not have and are not placed in the name of the trust.
Not all assets have to be probated
As this shows, not all your assets have to be probated at the time of your death. However, avoiding probate may not be possible without the right documents in your estate plan. This post does not contain legal advice, so those in McMinnville who want to learn more about avoiding probate may want to seek the assistance of an estate planning attorney.