What Type of Account is not Subject to Probate?
Hello, I'm Jonathan Barlow. I'm an attorney here at Clear Counsel Law Group, and I'm making this video today to clear up a common misconception that I'm frequently asked about. I'm commonly asked, and I was just asked this week, if there are certain types of assets that don't have to go through probate just because they're that kind of asset. For instance, this week I was asked yet again, "Well, isn't it true, Mr. Barlow, that a brokerage account doesn't have to go through probate because it's a brokerage"
I want to clear up that misconception, in there are no assets that just because they're that kind of asset, they don't go through probate. How we avoid probate is through how the asset is owned or whether there's a beneficiary designated on it. For instance, it doesn't matter if it's a brokerage account or an IRA or a savings account or a house. If those assets have only one person's name on them, and that person dies, and there's no beneficiary, that account's going through probate. The house is going through probate.
How to Avoid Probate
How do we avoid probate then, if we don't want the brokerage account to go through probate; how do I avoid that probate court process? In general, there's two ways: through ownership or through beneficiary designation.
Ownership, you can have a joint owner on the brokerage account, so when you die, the joint owner takes control and 100% ownership of the account immediately upon your death. The second ownership technique used to avoid probate is through the use of a revocable living trust or other trust documents or trust techniques. After you pass away, the trust keeps control of that asset, of that account, and distributes it according to your wishes that you put in the trust.
The second way to avoid probate with these accounts and other assets is through beneficiary designation. You can list somebody on there that you say, "When I die, transfer this account immediately to my son, to my daughter, to my friend," and essentially by presenting a death certificate to the brokerage company, they would transfer that brokerage account into your beneficiary's name.
Here at Clear Counsel, we take pride in helping people avoid that probate court process. It can be very time consuming, it's expensive, it's public. It's difficult for family members to go through that probate court process and have to wait a long period of time before they get those assets transferred to them.
We help people avoid that, and we've done hundreds and hundreds of trusts and other techniques to help people do that.
If you want help to avoid probate or to make sure that your assets avoid probate, or if you just don't know whether your account, your brokerage investments, your savings account is going to be going through probate, give us a call here at Clear Counsel Law Group, and we'll be glad to answer your questions and help you resolve that situation.